Ikea closing first big UK store since arriving in Britain in 1987

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
Ikea's store in Coventry, West Midlands, England. Photo: Education Images/Universal Images Group via Getty Images

Ikea has announced plans to shut its Coventry store, the first time the Swedish retail chain has closed one of its large UK sites since arriving in Britain 33 years ago.

Ikea said on Tuesday it would shut the loss making West Midlands store this summer due to high operating costs and changing shopping habits. About 350 jobs are at risk.

The city centre store was built in 2007 and had cost £35m. It is one of 22 ‘big box’ stores the Swedish retailer runs in the UK.

Ikea said the seven-level Coventry store was too expensive to run and had been shunned by shoppers, who favoured more traditional retail park Ikeas or online shopping.

As a result, visitor numbers have been “substantially lower than expected” and the shop has made “consistent losses,” Ikea said in a statement.

“The proposed closure of the store has not been an easy decision, particularly given the impact it will have on our co-workers,” Peter Jelkeby, country retail manager for Ikea UK and Ireland, said in a statement. “Although this isn’t an easy decision, this is the right decision for the long-term success of Ikea in the UK.”

READ MORE: UK retailers have 'cut 10,000 jobs already this year'

Dave Gill, national officer for the Usdaw union, told the Press Association the decision was “devastating news for Ikea staff”. Jelkeby thanked staff for their hard work and Ikea said it would try to find new work within the company for as many people as possible.

Ikea is known for its large, out of town furniture showrooms where shoppers can buy cheap flatpack furniture to take home on the day. The company first entered the UK in 1987 with a shop in Warrington, Cheshire, and came to symbolise the growing affluence of Britain’s middle classes in the late 1980s and early 1990s.

However, Ikea has been forced to rethink its business model in the last decade due to changing shopping habits. It has invested in its online store and opened smaller, inner city showrooms that let people browse the range and pick up orders. Ikea said it would set up a new online collection point for shoppers in Coventry.

“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,” Jelkeby said.

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