Retail: Mission Valley Location Eyes Annual
Sales of $50 Million
What’s Swedish, comes in a flat container and is sold in a big box?
The European retailer of assemble-it-yourself furniture and home accessories has extended its reach to San Diego. Its 200,000-square-foot store on Fenton Parkway, off Friars Road just west of Qualcomm Stadium, opens to the public Sept. 20.
Store officials have spent $25 million on their 13.2 acres of land and their brand-new building, which received its finishing touches last week. They have hired 250 employees and expect to do $50 million worth of business in their first year.
San Diegans who may have visited IKEA’s Orange County outlet will find themselves in familiar territory. They can leave the kids in a supervised play area, head upstairs and travel a maze-like pathway past showroom displays. Signs will direct them downstairs to view lighting, linens, housewares and other accessories. Midway is a caf & #233; serving Swedish specialties, from meatballs to lingonberries.
There are 15 IKEA stores in the United States. Thirteen stores are company owned, and Mission Valley is the company’s second U.S. franchise. Rene Hausler and Joerg Christen, who both started with IKEA 27 years ago at store No. 7 in Zurich, Switzerland, co-own and manage the place.
Hausler thinks a county of 2.6 million people has room for another furniture store, especially one that provides the “new ideas, new concepts” and the variety of merchandise IKEA provides. Having Costco and Lowe’s stores nearby will help store traffic, he said. He acknowledged the immediate neighborhood, where hundreds of multifamily housing units are on the rise, can’t hurt either.
Roll Up Your Sleeves
IKEA touts the low price of its furniture, which a customer must assemble, often with a wrench. Packing the product in flat boxes cuts down on damage and lets the company save on transportation, storage and final assembly costs, according to company literature.
With roots in Sweden, IKEA now has 156 stores in 29 countries. The IKEA Group is privately held by a Dutch foundation chaired by company founder Ingvar Kamprad. The company reported $881 million in U.S. sales during fiscal 1999 and $8 billion in worldwide sales.
IKEA has been in the Los Angeles area since 1990 and has stuck close to that market because of the “synergy” there, Hausler said. It has had an eye on San Diego for a while, he said, but a recession in the early 1990s slowed plans to expand south.
The company originally planned to establish itself on the East Coast and head West, Hausler said. Then Stor Furnishings, a company with a concept very close to IKEA’s, appeared in the Los Angeles area, and IKEA rethought its strategy, he said. IKEA ended up buying Stor.
Burbank, City of Industry, Carson and Tustin are IKEA’s other Southern California locations. The company opened a store in Fontana to serve the San Bernardino/Riverside county market, but it lost money and the store was closed, said company spokeswoman Marty Marston.
The company pushed into the San Francisco Bay area six months ago with a store in Emeryville. Another opens soon in Palo Alto.