Ikea says malls' expansion plans intact as customers return
Stockholm
IKEA'S shopping malls business, one of the world's biggest, said its expansion plans remained on track with visitors quickly returning to its premises after the lifting of coronavirus-related lockdowns, which had forced stores to close.
Ingka Centres, which has 45 malls anchored by Ikea stores across Europe, Russia and China, and plans to enter the United States in 2021, said footfall in the 12 months till August had fallen by almost a quarter, and tenant sales had dropped 16 per cent to 5.4 billion euros (S$8.6 billion).
Malls closed fully or partially for a few weeks in 13 of 15 markets early in the pandemic.
The company said in an emailed statement that occupancy was stable at 95 per cent in the fiscal year, and managing director Gerard Groener said work to nearly double the number of malls in the coming years was on track.
Alongside Ikea, Ingka Centres is shifting focus from out-of-town to smaller inner-city locations as it adapts to digitalisation and changing consumer behaviours. It is hunting for property in some 40 major cities, and in 2020 inked its first acquisitions, in London and San Francisco.
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"Whatever the so-called 'new normal' looks like, retail and leisure is adaptable and human society is geared to socialise," Mr Groener noted.
He said after Covid-19 restrictions were lifted in the spring, visitors quickly returned to the company's malls, which it refers to as meeting places.
Malls had a roughly unchanged total leasable area of four million square metres in the year, with 7,000 stores.
However, the move towards smaller urban malls, and a shift towards uses other than retail, ranging from playgrounds to community event spaces, will mean fewer stores, he noted.
Many retail chains are looking to reduce their overall net store count as their customers increasingly shop online.
Ingka Centres, however, said Adidas, H&M and Inditex-owned Zara were among brands adding stores in its malls during the year. In all, around 500 stores opened.
Ingka Centres is owned by Ingka Group which also owns most Ikea stores. The malls operate under brands such as Mega in biggest market Russia, and Livat in China. REUTERS
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