Ikea opens first city-center storefront

Ikea is headed for the city. The home-furnishings retailer opened its first city-center store in the district of Altona, where consumers can walk in off the streets--no cars or parking lots needed.

The store in the borough of Hamburg, Germany will serve as a test location for the retailer that built its popularity and success by opening sprawling suburban stores, according to Bloomberg.

The project targets urbanites who don't want to drive to the traditional outlets.

Breaking ground in the company's largest market, the store opening will cost Ikea $109 million. Ikea has 356 stores worldwide, 49 in Germany. This new site will be in Germany's second most affluent city.

"It's a very expensive experiment for us, but we want to know if the city-store concept works out," Johannes Ferber, managing director of Ikea's expansion told Bloomberg. "Altona could serve as a model for other big cities such as Berlin."

This move is the latest in a trend by retailers to bring traditionally larger storefronts from the suburbs to smaller spaces in cities. Earlier this year, Target began testing a smaller urban outlet, when it opened a 20,000 sq. ft. store in Minneapolis. Similarly, Walmart announced the expansion of its network of small formats, namely the Neighborhood Market and now Walmart Express. 

The retailer is forecasting about 4,000 shoppers will visit the store on weekdays, 8,000 on Saturdays and special event days.

"There are many city-dwellers who don't have a car or aren't willing to drive outside the city to do their shopping," said Ferber.

In fact, he expects more than half of the shoppers to arrive by bike. For those who don't bring their bicycles, the store will lend out cargo bikes and bike trailers for free transport of purchases.

For more:
-See this Bloomberg story

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