Ikea will close seven of its 41 stores in mainland China, reports the South China Morning Post. This comes as the furniture retailer grapples with the country’s weak property market and low consumer spending, which have dampened demand for its goods.
Following a comprehensive review, Ikea China said the seven stores would cease operations from February 2. These are located in Shanghai, Guangzhou, Tianjin, Harbin, Ningbo, Xuzhou and Nantong. One new small-format store is expected to open in Dongguan, in February, while another will launch in April in Beijing.
“Ikea’s decision to close some of its standard-sized stores and open small-format outlets indicates a shift away from large-scale expansion,” said Fan Xinyu, assistant professor of economics at Cheung Kong Graduate School of Business in Beijing. “Instead, it will focus on catering to the precise demand of targeted customer groups.”