Report: IKEA Eyes Furniture Rental, Stores In Urban Cores

Swedish retailer IKEA, the world’s largest furniture group, is reportedly looking for downtown retail sites in large cities around the world.

The furniture retailer is also looking at modifications to its business model that incorporate more environmentally friendly sustainable options for customers such as rentals, according to Reuters. 

What Happened

The moves come in response to the fact that many customers no longer have the time or the transportation to travel to huge out-of-town IKEA stores. 

"Especially in the cities, in the next few years, we will be very active looking for good locations," Juvencio Maetzu, finance chief of Ingka Group, told Reuters. Ingka owns most IKEA stores, the wire service said. 
Ingka CEO Jesper Brodin told Reuters that IKEA is exploring different avenues for expansion and sustanability in a pivot from the low-cost, disposable furniture model. 

 "Testing out opportunities for leasing offers is one of the ways we are challenging ourselves to deliver on our transformation strategy,” Brodin said. "Climate change and unsustainable consumption are among the biggest challenges we face in society.”

Why It's Important

Changing population dynamics mean that more people are living in urban settings and fewer own their own cars.

Additionally, IKEA customers want to make less of an impact on the environment, Reuters said. 

Cities where IKEA is interested in opening midsize stores include include New York, London, Paris, Berlin, Madrid, Barcelona, Shanghai, Moscow, Mumbai and Tokyo. 

What’s Next

Maeztu also said IKEA plans to expand TaskRabbit, a U.S. online marketplace for odd jobs like furniture assembly that the Swedish company bought in 2017, to many more markets — and is looking for other similar partnership opportunities.

Related Links: 

Raymond James: Steelcase A Strong Buy After Wednesday's 'Puzzling' Decline 

Bearish Analysts Discuss Williams-Sonoma's Strong Q4 Earnings