Mega store’s arrival is good news and bad news for other retailers
By Jaclyn Giovis | South Florida Sun-Sentinel

When Ikea opens its first Florida store in Sunrise next month, it will enter a crowded South Florida furniture market already swooning from sluggish home sales.


Experts predict the 293,000-square-foot store will siphon a fraction of sales from a variety of retailers, such as City Furniture and Rooms To Go, but not enough to hurt any one business.

Ikea’s trademark flair could boost consumers’ overall interest in and spending on home furnishings, said Jerry Epperson, an analyst for Mann, Armistead & Epperson Ltd., a Richmond, Va., furniture research firm.

“They expand the market in almost every city they go into,” he said.

With more than 10,000 products, from bedding to food, Ikea also will compete with mass retailers like Target and Bed, Bath & Beyond. Its brand often attracts college students, pennywise homeowners and shoppers who don’t mind assembling their own furniture. Ikea has entered other cities where Rooms To Go has stores, but the two companies don’t compete head-to-head for the same furniture buyers, CEO Jeff Seaman said.

“Ikea doesn’t really affect us,” he said. “We almost like them.”

The housing slump, Seaman said, is more worrisome than Ikea’s opening in Sunrise.

Furniture stores count on new-home sales to help churn business. And South Florida furniture dealers say falling home sales and prices have put a dent in their sales.

Sales at City Furniture, for example, are expected to slide 10 percent this year to about $310 million from $342 million a year ago, said Keith Koenig, CEO of the Tamarac-based chain.

At Rooms To Go, annual sales are expected to be off as much as 5 percent, Seaman said, noting that’s a departure from steady growth in recent years.

Modernage Furniture, a longtime South Florida furniture chain, went out of business earlier this year. Even without Ikea, South Florida has more of the nation’s top 100 furniture stores than any other metropolitan area, making it the most competitive and historically one of the most successful furniture markets in the country.

Officials from Pompano Beach-based Baer’sFurniture and Coconut Creek-based Carls Furniture say it’s hard to predict how Ikea will affect their business, if at all. Both retailers tend to attract customers willing to spend more money.

“Most people that come into our store don’t want to assemble a dresser,” City Furniture’s Koenig said. Furniture industry experts struggle to cite examples where Ikea has hurt business at neighboring stores or forced competitors to close, though furniture dealers in places like New York, Los Angeles and Boston faced a tougher game initially.

That’s not to say Ikea’s arrival into a market comes without worry and scrutiny. The retailer’s Emeryville, Calif., opening in 2000 raised serious concern in the San Francisco Bay area, where a group of independent furniture and housewares stores organized to fight their new competitor. Months after Ikea opened, though, sales at their businesses grew and the group disbanded.

In South Florida, Ikea’s high-profile entry doesn’t scare small business owner Susan Rocco, who has operated The Kitchenworks in Fort Lauderdale for 18 years.

“It doesn’t faze me,” Rocco said. “We have a very specific niche in this marketplace.”

Her business on East Sunrise Boulevard focuses on kitchen design and installation and sells cabinets for the entire home. Ikea may be a popular destination for shoppers who want to outfit their kitchen, she says, but it still acts more like a big-box store in terms of service.

“We give individual attention to the client,” Rocco said, noting her store also caters to the high-end customer.

Ikea’s strategy is built on low prices and a theme park-like shopping experience. Although the retailer does not disclose sales per store, experts say the average volume is $80 million to $100 million annually. Last year, the company reaped U.S. sales of $2.5 billion.

And the chain already has an overwhelming customer base in Florida. About 325,000 residents have shopped the company’s catalog, online store or have visited a location someplace else. And more than a third of those customers live in South Florida.

Paul Sutherland of Fort Lauderdale is one of those customers. The 44-year-old freelance creative designer has been searching South Florida for an opaque black glass coffee table for his downtown loft since he moved here nine months ago. Most stores sell bulky, wood furniture, he said, and the only table he found that came close to what he wanted cost more than $2,000. Too expensive, he decided.

“Anybody with a design sense is excited about Ikea,” said Sutherland, who was happy to learn that Ikea sells a black glass coffee table for $99.

He plans to buy the piece when the store opens.

Staff Writer Jaclyn Giovis can be reached at jmgiovis@sun-sentinel.com or 954-356-4668.

ONLINE PREVIEW: For a sneak peek of what you can expect from the new Ikea store, visit Sun-Sentinel.com/ikea