Marking the first big closure of a UK outlet, Ikea has announced to shut down its store at Coventry city centre in the summer.
The reason attributed to the recent closure announcement are “consistent losses” since it opened in 2007. The store was visited by fewer people than anticipated.
In the wake of the situation the company has announced to consult 352 workers affected by the shut-down and would help them to find jobs at other stores.
The Usdaw union commented it was “devastating news” for staff. “Our priorities are to seek redeployment opportunities, minimise compulsory redundancies and secure the best deal we can for our members,” commented Dave Gill, national officer for the Usdaw union.
In response Ikea it remained committed to growth in the UK, an announcement which it supports with the fact that the company has 22 stores in the UK.
“However, given its location and the size of the land available at the time, the store was built over seven levels, which resulted in a significant impact on the operating costs of the store and the shopping experience for customers,” the company added.
“In addition, the changing behaviour of customers in the area who prefer to shop in retail parks and online has resulted in visitor numbers being substantially lower than expected and continuing to decrease over time.”
Furthermore, the company also stated that it had built the Coventry site as one of its earliest examples of testing a new format to meet customers’ changing needs. According to reports the city centre project costed £35m.