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NEW YORK CITY—As people get older they often downsize, moving from suburbs and into smaller spaces in urban areas. Some retail stores are following this same trend. With Target’s small format stores, now IKEA’s “Planning Studios,” companies are also embarking on a “good things come in small(er) packages” strategy.
At 999 Third Ave., between E. 59th and E. 60th streets on the Upper East Side of Manhattan, IKEA is launching a “Planning Studio.” The new 17,530 square feet store spans three floors. Asking rent at the Zucker Organization’s building was $350 per square foot.
Lars Petersson, country manager, IKEA retail US, states the company recognized the rapidly changing retail environment, so for long-term growth is moving to where their customers are. “New York City is the natural choice to open the first city center store—the most vibrant, dynamic city in the US, and the epicenter of retail, business, and culture,” he says..
With home visits, focus groups and conversations, New Yorkers provided input as part of the development of the Planning Studio concept, according to an IKEA spokesperson. The strategy centers on urban living and small spaces. Customers visiting the store will select and order IKEA products for delivery to their homes. The spokesperson emphasizes in addition to opening in city centers, the new global strategy focuses on customer services and digitalization.
IKEA US has already invested in its e-commerce by lowering shipping and delivery prices, and adding “click and collect” where shoppers make purchases online, then pick up products. For those averse to IKEA’s well known “do-it-yourself” furniture assembly, the store now refers customers online to TaskRabbit’s hired-for-help services.
The Swedish furniture company plans to remodel its Brooklyn store. It will continue its operations in Long Island, and the NJ cities, Elizabeth and Paramus. In November, IKEA US opened an approximately 975,000 square-foot fulfillment center in Staten Island. IKEA is also exploring other opportunities in New York and other major cities including LA, San Francisco, Chicago and Washington, DC.
Colliers International’s Eric Yarbro, Robert L. Freedman, Jonathan Plotkin, Timothy Pond and Taylor Bell represented IKEA. Squire Patton Boggs attorneys led by Stacy Krumin, John Thomas and Jenny Vaugh served as IKEA’s legal counsel.
Betsy Kim is the bureau chief, East Coast, and New York City reporter for Real Estate Forum and GlobeSt.com. As a lawyer and journalist, Betsy has worked as the director of editorial and content for LexisNexis Lawyers.com, a TV/multi-media journalist for NBC and CBS affiliated TV stations in the Midwest, and an associate producer at Court TV.
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