What: Ikea opens its first location in New York city center

Why it is important: Ikea is not anymore a big box concept, but increasingly competes with tier 1 large locations in city centers across the planet.

IKEA is set to open its first store in New York City, marking a significant shift in its strategic approach from suburban to urban retail locations. This new development, a collaboration with Ingka Investments, part of Ingka Group which owns most IKEA stores globally, involves a major real estate investment at 570 Fifth Avenue. This site, historically significant for being the largest development on the street in over six decades, will feature a mixed-use commercial building including a Class-A retail and office tower developed by Extell Development Co., set for completion in 2028.

The IKEA store will occupy 80,000 square feet over two cellar levels with a direct entrance on Fifth Avenue. This move is part of a broader transformation within IKEA to adapt to urban growth and changing consumer preferences, emphasizing city center presence. IKEA has been expanding this urban store concept globally, with locations in major cities such as Tokyo, Madrid, Paris, and London, and smaller planning studios across Europe.

The Fifth Avenue project is expected to boost the local economy and rejuvenate the retail landscape, which suffered significantly during the pandemic. Ingka Investments will hold a one-third stake in the overall project, which includes full ownership of the retail component.

Ikea plans store on Fifth Avenue