Ikea is downsizing and moving into Manhattan with its first 'city center' store in 2019

Key Points
  • Furniture retailer Ikea is moving into Manhattan this spring with its first "city center" store.
  • The company plans to open 30 small-format stores over the next three years.
  • Ikea's move into New York comes as many retailers shrink their existing full-size stores.
Shoppers look at merchandise at a Ikea store in Paramus, New Jersey.
Stephen Chernin | Getty Images

Furniture retailer Ikea will shrink its typically massive store to open its first location in Manhattan with a new "city center" format in 2019, the company said Monday.

Next spring, Ikea will open its first smaller-format shop in the U.S. at 999 Third Avenue in New York, where it will sit alongside Bloomingdale's, Home Depot and CB2. The company previously announced it planned to open 30 of these "city center" locations over the next three years.

Ikea has a store in nearby Brooklyn, but this will be the first location on the island.

Ikea CEO on the company's first store in India
Ikea CEO on the company's first store in India

Ikea's move into Manhattan comes as many retailers — including Target, Kohl's and Macy's — are shrinking their existing full-size stores or experimenting with opening up smaller-format locations in densely populated markets such as Manhattan, Los Angeles and Chicago. As more and more shoppers are turning to the internet to ring up purchases, companies are finding they don't need as much real estate.

"We recognize that we are in a rapidly changing retail environment, and to be fit for long-term growth, Ikea is transforming in a way that lets us meet our customers where they are," Lars Petersson, the manager of Ikea's U.S. retail division, said in a statement. "New York City is the natural choice to open the first city center store — the most vibrant, dynamic city in the U.S., and the epicenter of retail, business, and culture."

Ikea said its new store in Manhattan will act as a "planning studio" for shoppers to pick out items they want delivered to their homes. It said it will offer lower-priced shipping and delivery for city dwellers, in addition to assembly services, help with financing and a buy online, pick up in store option.