Sales Slump in IKEA USAEminent IKEA may be, but Ingvar Kamprad's build-it-yourself furniture empire is not impervious to a sales slump in the US. According to the International Council of Shopping Centers, over 1,200 home furniture and furnishings stores have closed last year. In the context of economic woes besetting the American consumer today, IKEA may have been pushing its luck when it expanded its domain with its very first store in New York City last June. The move is understandable given that IKEA's second-largest market is the US. However, there is no such thing as a better market; IKEA's U.S. division saw last fiscal year's sales go down relative to 2006's. This is all too evident in the way American shoppers tend to buy IKEA's cheaper products, like bookcases for $79. American shoppers have been reluctant to buy home furnishing products when they don't have funds to even expand or buy a house due to the three-year housing sales slump in the US. Fortunately, IKEA has grabbed shares off some competitor's markets like Levitz Furniture. Wal-Mart may sell home furnishings but it has nothing on IKEA's leviathan range. Any of IKEA's over 270 stores worldwide sells over 10,000 kinds of home goods. Most are build-it-yourself so they're relatively affordable. Ingvar Kamprad's legacy is ultimately his name; IKEA has virtually become a brand that consumers can easily go to in a country that is beset by an ailing economy. |
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