IKEA UK has announced the proposed closure of its Coventry store this summer.
The IKEA store, one of 22 in the UK, was built in 2007 in the city centre, and was one of the retailer’s earliest examples of testing a new format to meet changing customer demand. However, given its location and the size of the land available at the time, the store was built over seven levels, states the retailer – which resulted in a significant impact on operating costs and shopping experience.
In addition, the retailer is seeing its customers increasingly prefer to shop in retail parks and online, resulting in visitor numbers being substantially lower than expected, and continuing to decrease over time – factors which have led to the store making consistent losses.
The retailer says it has tried a number of initiatives over the years to drive sales growth and make the store more cost-efficient, such as moving various business operations to the site – yet these have not resolved the fundamental challenges connected to the location and the format of the store. IKEA also looked at options for downsizing or reconfiguring the store, but the nature of the site means this is not a realistic option.
IKEA will now enter a period of consultation with the 352 members of staff affected by the closure to discuss the proposals and next steps. The retailer wishes to retain as many people as possible within IKEA and, where this is not possible, help them find new employment.
Peter Jelkeby, country retail manager and chief sustainability officer, IKEA UK and Ireland, says: “The proposed closure of the store has not been an easy decision, particularly given the impact it will have on our co-workers. I would like to thank our Coventry co-workers who have contributed enormously throughout this time.
“Although this isn’t an easy decision, this is the right decision for the long-term success of IKEA in the UK. At IKEA, we are constantly challenging ourselves to find ways to meet the needs of our customers and we will continue to try and test, investing in stores, fulfilment centres, city centre formats and our digital capabilities to make IKEA even more affordable, convenient and sustainable.”
The Coventry store will remain open during the consulatation period, and the retailer is exploring alternative ways for customers in Coventry, such as the introduction of collection points across the city.
This year, IKEA opened its most sustainable store to date, in Greenwich, and two Planning Studios in London – one on Tottenham Court Road and another in Bromley. Its parent Ingka Centres ha alsos acquired a shopping centre in Hammersmith, paving the way for the brand's first small-format UK city store.