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Business trends

Ikea to open first Japanese city-center store in 2020

New outlet highlights shift from big suburban locations to small urban showrooms

Artist's rendering of Ikea's first Japanese city-center store (Illustration courtesy of Ikea)

TOKYO -- Ikea announced on Thursday plans to launch its first city-center store in Japan, targeting mainly young shoppers and foreign tourists.

To be located in Tokyo's trendy Harajuku district, the store is scheduled to open in spring 2020. Construction of the building that will house the 2,500-sq.-meter outlet is currently underway by NTT Urban Development.

The new store will be about 10% the size of existing Ikea stores, which are found outside city centers in Japan. Its small footprint reflects the company's shift away from conventional out-of-town stores with large in-store inventories toward online shopping and home delivery of products purchased in showrooms.

The new business model allows Ikea to open stores in crowded urban areas, where maintaining large product stocks is not practical.

Harajuku is well-known for its Japanese youth culture and fashion, and has been an increasingly popular tourist destination in recent years.

The Swedish company -- the world's largest furniture retailer -- has been rapidly expanding in Asia. It opened the first of 25 planned Indian outlets in August.

Ikea had 422 stores in more than 50 countries as of fiscal 2018 ended August, during which it attracted 957 million shoppers and generated $43.9 billion in sales.

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