Atlantic Station, the 138-acre mixed-use project under development at a former brownfield site in Midtown Atlanta, has undergone more twists and turns in its evolution than a riveting book. The latest chapter: IKEA, the Swedish home furnishings retailer — famous for its tealight candles, BILLY bookcases and Swedish meatballs — is planning to build a two-story, 366,000 sq. ft. store on a 15-acre site located at the western edge of the urban redevelopment project. Construction on the building could begin as early as spring 2004, with an anticipated opening date of summer 2005.
The Atlanta store will be IKEA's first in Georgia and the Southeast and is part of the company's aggressive expansion efforts in North America. The company expects to open at least five new stores per year for the next decade.
IKEA's announcement in mid-September helps fill a major void at Atlantic Station. Last year, preliminary plans to build a 250,000 sq. ft. aquarium on the same site were scrapped when financial backers opted to construct the aquarium next to Centennial Olympic Park. At the time, the decision was considered to be a big blow for the Atlantic Station project.
But IKEA is a retailing powerhouse that generates a lot of buzz wherever it expands. In 1998, I toured a newly opened store in Schaumburg, Ill., a Chicago suburb. It was the first time I ever saw a Vermaport, a shopping cart conveyer that operates like an escalator. More importantly, I was struck by the vast inventory. IKEA offers nearly 10,000 home furnishing items and is especially popular among college-educated women in their 30s who have children. IKEA distinguishes itself from other retailers in many ways, not the least of which is its curb appeal. IKEA's trademark bright yellow and blue colors make it a living billboard.
The privately held company — which is expanding when other retailers are hesitant to do so — posted global sales of $10.8 billion in fiscal year 2002 and $1.86 billion in North America. IKEA has more than 185 stores in 31 countries, including 18 stores in the U.S. and 11 in Canada. “We believe our product range, product design and affordability are what make us so popular,” says Pat Merwin, real estate manager for IKEA. “The family-friendly shopping experience adds to the caché.” Company officials say a healthy percentage of IKEA customers spend two to three hours in their stores.
Merwin's job is to work with a local broker to identify potential sites and investigate new markets. A suitable IKEA site must be 12 to 20 acres, be located near major arteries with high traffic counts, and provide attractive demographics. A typical trade area for IKEA includes 700,000 households. One of Atlantic Station's prime selling points is that it is located at the nexus of Interstates 75 and 85 in the heart of Midtown Atlanta.
Bruce Macleod, managing director of retail for Atlantic Station, says the addition of IKEA to the tenant mix that already includes anchors Dillard's, Publix and Regal Theatres will only serve to strengthen the mixed-use development. “We've been dedicated to bringing the right mix of tenants to this development — both from an office and retail perspective,” says Macleod. “This latest announcement gives us even more leverage to do so.”