Big Deal The Why the battle for IKEA's new Atlantic Canada store was over before it started
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
BUSINESS ATTRACTION
The
Big Deal
Why the battle for IKEA’s new
Atlantic Canada store was
over before it started
By Stephen Kimber
atlanticbusinessmagazine.com | Atlantic Business Magazine 119
Date:16-04-20 Page: 119.p1.pdf
consumers in the Halifax area,
but it’s also in the crosshairs of a
web of major highways that lead
to and from every populated nook
and cranny in Nova Scotia, not to
forget New Brunswick and Prince
Edward Island, making it a potential
shopping destination for close to
two million Maritimers.
No wonder its 500-acre site
already boasts 1.3 million square
feet of shopaholic heaven with
over 100 retailers and services,
including five of those anchor-type
destinations: Walmart, Home Depot,
Costco, Canadian Tire and Cineplex
Cinemas.
Glenn Munro was apologetic. I’d been All it needed was an IKEA.
calling and emailing him to follow up on
January’s announcement that IKEA — the
iconic Swedish furniture retailer with 370
stores and $46.6 billion in sales worldwide
B
y now, the IKEA creation
last year — would build a gigantic (for us story has morphed into myth:
in 1947, Ingvar Kamprad,
at least) $100-million, 328,000-square- an eccentric, dyslexic 17-year-old
foot retail store in Dartmouth Crossing. He Swedish farm boy, launched a
mail-order company called IKEA.
hadn’t responded. He’d invented the name using his
initials and his home district. Soon
after, he also invented the “flat
I wanted to know how and why pack” to more efficiently package
IKEA had settled on Halifax and
not, say, Moncton as the site for 328,000 and ship his modernist build-it-
yourself furniture. In 1953, he
the first of a dozen new Canadian
stores it plans to open over the next
square feet opened his first store, then another
and another, expanding into
decade. Munro, the Montreal-based Size of IKEA’s new
Norway and Denmark, then Europe
vice president of both Dartmouth $100-million retail store and… the rest is history still in the
Crossing Ltd. and its parent North in Dartmouth Crossing making.
American Development Group, Now 90, Kamprad is guesstimated
seemed like the right person to ask. to rank somewhere between
“It’s been my baby since day
D
artmouth Crossing is what’s first and eleventh on your pick of
one,” he’d happily told CBC TV Nova world’s-richest lists. His wealth
Scotia host Bob Murphy the day known as a “power centre,”
which is what folks who can only be estimated, however,
IKEA announced its plans. since IKEA has a reputation for
Now he wasn’t so eager to talk; know call those sprawling, open-
air destination shopping “cities” secrecy and for what are delicately
perhaps famously secretive-for- described as “opaque business
the-sake-of-being-secret IKEA that have become our twenty-
first-century shopping centres. practices… operating with a web-
had clamped a lid on even friendly like network of holding companies,
outsiders making un-vetted Power centres are usually anchored
by three or more standalone big owners, and subsidiaries.”
comments about corporate business. The Ministers of the European
Munro offered instead to put me box stores, sprinkled among any
number of multi-specialty-tenant Parliament claim that was designed,
in touch with someone at IKEA in part at least, to avoid more than
who’d been involved in the locating buildings and awash in acres of
free parking. €1 billion in taxes over the past six
process, who would “probably” pass years. In February, the ministers
me along to the corporate public The power centre that is
Dartmouth Crossing has been demanded an official investigation
relations department. That someone into the company’s tax practices.
did. pushing out and up from the edge
of Nova Scotia Highway 118 for None of that has slowed IKEA’s
While I waited for answers to my growth. Last year, it reported an
questions, I did some due diligence close to a decade. It is not only
located conveniently cheek by 11.2 per cent increase in sales over
of my own. the year before as it continued
jowl to 400,000 or so potential
120 Atlantic Business Magazine | May/June 2016
Date:16-04-20 Page: 120.p1.pdf
“growing in almost all our markets,”
including in its two most rapidly Make your dream
expanding territories: China and
Russia. The furniture retailer’s
home a reality.
individual stores continue to get
ever larger too: the current largest, BLE
OO D AVAILA
near Seoul, South Korea, opened FINEST W
last year “with a sales space nearly
as big as the Louvre museum.”
Perhaps that’s understandable,
given that the retailer stocks more
than 12,000 sofas, beds, desks,
kitchen faucets and assorted homey
knickknacks.
Canadians buy a lot of them. In
2014-15, IKEA’s Canadian sales
rose more than 10 per cent to $1.79 CRAFTED
WITH TIM
billion; online sales jumped 40 per ELESS B
EAUTY
cent.
One of Stefan Sjöstrand’s first
Please take
assignments after he was appointed
IKEA Canada’s president in 2014,
in fact, was to “make IKEA more
accessible for Canadians… When
we really dug into it… we could
see that the potential is here
for us.” In November 2015, IKEA
a seat.
The meeting is about to begin!
Canada announced it would open
Dangle your legs off a paddleboard,
12 new stores by 2025, doubling
the number of its outlets here. “We hop in a golf cart, or pull up a comfy
are going to expand from coast to log at the beachside mussel bake.
coast,” Sjöstrand declared. “We’re Why settle for a chair when you
going to expand in new cities, and can brainstorm from a yoga mat,
we’re going to expand in existing or surrounded by paint at our popular
cities.” Brush with Good Cheer sessions.
Coast to coast? New cities? It We’ve been ‘chairing’ meetings
was time to dream. Again.
differently at White Point for over
OVE
25 years – when we opened our
YO U WILL L
first official conference facility. A HOME
Since then, we’ve become synonymous
with unique, rejuvenating, and
memorable business gatherings.
I
KEA’s January 22, 2016 Call Anne today and start thinking
announcement that it had bike seat, kayak, sauna bench,
decided to return to Halifax was
or your favourite bar stool in
not only a bigtime business brag
for Dartmouth Crossing, but it also the Founder’s Lounge.
$129
served as a long-sought personal from
vindication for many Halifax
consumers.
“I got mail from the people living all-inclusive Call us at Dow & Duggan
in Halifax, in Nova Scotia, asking meeting Log Homes International today.
us to open up a store in the area,” package
PPDO. Plus tax & gratuity.
Sjöstrand explained at the news
conference, “and I’m very thrilled to
be able to make this announcement
for the people living here.”
Why is IKEA such a big deal?
Let’s start with “return.” In
1975, IKEA — by then already (902)852-2559
a household name in Europe,
thanks to its stylish, low-cost, whitepoint.com www.dowandduggan.ca
atlanticbusinessmagazine.com | Atlantic Business Magazine 121
Date:16-04-20 Page: 121.p1.pdf
deliver them to consumers in the Moncton’s charms and inviting
1947 Maritimes. At its peak, MyBoxBuyer
had 20 employees shuffling
the company to consider the area.
When he posted his invitation
Year that 17-year-old between here and there. online, more than 400 people
Swedish farm boy Ingvar Now, there will finally be an signed on in support.
actual IKEA store in Halifax again. LeBlanc received a polite, but
Kamprad launched a But why here? In Halifax? Why non-committal response from the
mail-order company not in Moncton? company, “saying our letter would
called IKEA Moncton, Halifax’s primary be sent along to the appropriate
and sometimes bitter rival for people for consideration.”
regional commercial and economic A month later, Sjöstrand,
supremacy, bills itself as the hub of surrounded by beaming Halifax
assemble-it-yourself furniture and the Maritimes. It has used its more city officials — including Mayor
quirkily iconoclastic marketing — central geographic location — not Mike Savage, Deputy Mayor Matt
decided to dip its toe in the North to forget its geographic proximity Whitman, MLA Joachim Stroink,
American retail market by opening to Maine and its additional MP Darren Fisher and a host of
its first modest retail operation in population of over one million other grinning councillors and
Dartmouth’s Burnside Industrial people — to attract everything local business lights — were cutting
Park. The store was small but it from big-name rock concerts and ribbons in Halifax.
was a huge success, attracting the
city’s then-still-young, family-
building, home-owning baby “IKEA coming to Halifax.
boomers and university students.
For Haligonians, our brief moment
Full store. Up yours
as “North America’s only” became a Moncton!”
matter of local pride. We have IKEA. Halifax Twitter user
And then suddenly, IKEA was
gone, shut down, shuttered, so long, sporting events like last year’s The reality is that Moncton may
hejdå. There was never much of FIFA Under-20 Women’s World Cup have been nearly a decade late to
an explanation from traditionally to transportation companies and the IKEA game.
zipped-lips IKEA. There were international call centres. Two other Which brings us back to Glenn
hints the city had withdrawn a big box stores — Cabela’s and Bass Munro. Munro, the managing
property tax rebate, but the more Pro Shop — are currently building partner for Eastern Canada at
likely explanation was that Halifax Moncton outlets. Why not IKEA? North American Development,
simply wasn’t big enough for IKEA’s That was exactly the question is responsible for development
grandiose ambitions. local area councillor Andrew strategy for three million square
Haligonians begged to differ. LeBlanc asked himself last feet of real estate in the Halifax and
But that didn’t matter. After the November after Sjöstrand’s non- Montreal areas.
closure, Atlantic Canadians — still specific announcement of IKEA’s When North American opened
eager to fill their homes with Canadian growth plans. its Carrefour de la Rive-Sud power
everything from Stocksund living “I know my wife really likes centre in Boucherville on the
room sofas to Godmorgon bathroom IKEA, and I like some of their stuff, outskirts of Montreal in 2003,
sinks and cabinets — had to buy and a lot of our friends do, and I IKEA was one of its big box anchor
online and pay for shipping, or thought this is a cool opportunity,” tenants.
travel to Montreal or Boston to get LeBlanc told Global News. “We have “It was just a question of time,”
their furniture fix. Mike Smith, a space here, we have developers Munro told the CBC. “We’ve
Halifax entrepreneur, even created who have land and we certainly been talking with them since
a booming boutique business could assist to bring IKEA in.” He [Boucherville], on and off and they
called MyBoxBuyer.com, to pick up immediately sat down and wrote a said, when we’re ready, we’ll come
orders at Quebec IKEA outlets and personal letter to Sjöstrand, touting and talk to you.”
122 Atlantic Business Magazine | May/June 2016
Date:16-04-20 Page: 122.p1.pdf
Two years later, when North Dartmouth Crossing land that had
American first pitched the idea Dartmouth Crossing conveniently been held open for its
of Dartmouth Crossing to Halifax arrival.
city councillors, it dangled the by the numbers: Deal done. Break out the IKEA
possibility IKEA could be part of its 500-acre site Svalka champagne glasses. As one
retail mix. Halifax Twitter user tweeted: “IKEA
At the time, however, IKEA
1.3 million sq. ft. coming to Halifax. Full store. Up
was fully engaged elsewhere, 100+ retailers yours Moncton!”
developing a new IKEA in
Winnipeg. The Winnipeg store
Estimated 2 million
I
was mildly controversial because consumers KEA’s response to my questions?
the city and the province About the factors that go into
promised $18.5 million worth of deciding where it will locate
infrastructure improvements to build [Dartmouth Crossing] right,” an IKEA store? About the process
lure the retailer there. (For the Munro told the Macdonald Report, that led to the decision to set up in
record, Halifax city officials insist a weekly feature publication of Halifax? About whether there are
there were “no rebates, tax breaks allnovascotia.com. “This was not studies that show the economic
or any other incentives” to entice a short-term play. We designed impact of an IKEA on a community?
IKEA to Halifax. And a provincial the park so some day in the future, And so on…
spokesperson adds it offered no when someone like IKEA decided Well, after an initial email saying
“provincial incentives” either.) to look at the market, there was no the company would be “happy to
“We have to do Winnipeg first,” choice but to come to Dartmouth help with what you may need,” no
IKEA officials advised Munro in Crossing.” one from IKEA got back to me
2007, “and, after Winnipeg, we’ll It worked. Although IKEA did Did I mention IKEA is known for
take a look, take a breather.” its due diligence — it also looked its secrecy? •
By 2014 — breather taken and at a shuttered Rona store and an
IKEA’s new president in office — undeveloped 200-acre tract in FEEDBACK
negotiations “started to heat up.” Halifax’s Bayers Lake park, and * dchafe@atlanticbusinessmagazine.com;
Munro was ready. “We spent probably considered Moncton sites skimber@atlanticbusinessmagazine.com
more money than we needed to to too — it soon settled on the plot of a @AtlanticBus; @IKEA; #BigDeal
Mile One Centre, St. John’s, Newfoundland & Labrador
Held in partnership with:
Noia Conference 2016
Connecting Canada’s
Offshore Oil & Gas Industry
150 leading suppliers showcasing today’s foremost technologies, products and services
2,500 visitors from 800 companies across Canada, US and Europe
97% of visitors agree this is the #1 industry event in the region
4 days of the most current information at the Noia Oil & Gas Conference, the largest
offshore conference in Canada, held alongside the expo
June 22 & 23, 2016 | Mile One Centre | St. John’s, NL
atlanticcanadapetroleumshow.com
atlanticbusinessmagazine.com | Atlantic Business Magazine 123
Date:16-04-20 Page: 123.p1.pdfYou can also read
