(qlmbusinessnews.com via uk.reuters.com — Tue, 4th Feb 2020) London, UK —
Swedish chain says Coventry city centre store loses money and will shut this summer
Ikea is to close its Coventry city centre store this summer, marking the first closure of one of its large format UK branches.
The Swedish furniture chain says the shop has consistently lost money since it opened in 2007, with a declining number of visitors as shoppers visit retail parks or buy online instead.
The retailer says it will enter consultations with the 352 employees affected by the closure and would like to retain as many as possible in the company, although the closest outlets are in Birmingham and Nottingham, approximately 30 and 50 miles away.
Coventry was one of Ikea’s first attempts at opening a new format, city centre store to respond to the changing habits of its customers. It blames the size of the seven-storey building for its higher operating costs and says it has been unable to make the store more cost-efficient or repurpose it.
Peter Jelkeby, the country retail manager and chief sustainability officer for Ikea UK and Ireland, said the Coventry closure was not an easy decision, but was the right one for the long-term success of Ikea in the UK.
“At Ikea we are constantly challenging ourselves to find ways to meet the needs of our customers and we will continue to try and test, investing in stores, fulfilment centres, city centre formats and our digital capabilities to make Ikea even more affordable, convenient and sustainable.,” he said.
In recent years, the chain has trialled opening smaller city centre outlets, on Tottenham Court Road in central London and Bromley in south-east London, to attract a different range of customers who do not travel by car to visit its usual “big box” stores. Ikea currently has 22 UK stores and says it is still focusing on growth, despite what it calls a “changing retail environment”.
In January, Ikea bought the Kings Mall, a shopping centre in Hammersmith in west London, which it plans to redevelop, and is understood to be looking for more malls in the UK. The chain already owns 44 malls globally, which it built itself. Ikea said last October it had strengthened its UK property team as it looks to take advantage of bargain prices in Britain’s crisis-hit retail property market to secure smaller and more accessible sites in city centre locations.
Ikea’s Coventry store has a prominent position in the city centre and the city faces the challenge of how to repurpose a large and distinctive-looking building when the branch closes in the summer.
By Joanna Partridge