The retailer is buying the store from the creditors of Arcadia Group, which collapsed with $1.1 billion in loans and a bigger-than-expected pension deficit in November last year.
According to Krister Mattsson, who is the head of the investment arm of Ingka Group, which owns most IKEA stores, the three floors of the building will be turned into a new store that will open in either summer or autumn of 2023.
“A conditional purchase agreement has been signed to acquire a property at 214 Oxford Street (Oxford Circus) in London,” Ingka Investments said. “The investment supports the transformation of Ingka Group’s retail business, bringing IKEA closer to customers.”
The Swedish furniture giant has been embracing inner-city store formats in response to consumers’ changing shopping behaviors. These small-format stores function in tandem with IKEA’s suburban warehouse stores.
The company opened its first inner-city store in Paris in 2019. Another such store is slated to open in Hammersmith, London in the coming months.
The Oxford Street store, however, will be the largest inner-city format store the company has opened to date, Mattson added.