Ikea set to invest $1.8b in London as it opens first high street store in UK

STOCKHOLM • Ikea said yesterday it would invest £1 billion (S$1.8 billion) in London over three years, as it opened the doors to its first high street Ikea store in Britain, anchoring its first-ever inner-city mall in the capital's Hammersmith district.

Ikea, known for its giant out-of-town warehouse stores, is in the midst of a strategy shift towards smaller inner-city locations, and more digital and other services, as it adapts to new shopping habits.

Ingka Group, the owner of most Ikea stores worldwide, and also of Ikea store-anchored shopping malls across Europe, Russia and China, opened the first of its new, smaller inner-city store formats in Paris in 2019.

The planned investments in London would be in existing and new stores, distribution and delivery services as well as various pilot trials, it said yesterday as it inaugurated the Hammersmith store and mall.

"Using London as a test bed for innovation, the retailer will trial and develop new formats and initiatives," it said in a statement.

The next inner-city Ikea store in London is due to open in the autumn of 2023, Ingka Group said, on Oxford Circus where it bought an iconic building last year.

Ms Cindy Andersen, head of malls subsidiary Ingka Centres, said the mall in Hammersmith was now fully let, against a 25 per cent vacancy when Ingka bought it in late 2019, defying a commercial property market downturn.

She predicted that the redeveloped mall - or "meeting place" as Ingka itself calls its malls - would double annual footfall, compared with 2019 figures, to six million.

Ingka Centres' second inner-city location to open is now expected to be in San Francisco, where it is redeveloping an ailing mall bought in 2020.

REUTERS