Ikea to usher in next wave of retail along I-69 corridor

If the stretch of I-69 from Fishers to Noblesville isn’t yet considered a hub of Big Retail in Central Indiana, a seller of Swedish meatballs and self-assembly bookcases is about to usher in the next wave.

Ikea on Tuesday announced plans to open a 296,000-square-foot store in the fall of 2017 on 35 acres southeast of I-69 and East 116th Street in Fishers. Construction on the estimated $40 million project will begin in the spring.

The wildly popular furniture retailer, with 41 stores and sales of $4.6 billion in the U.S., joins a host of shopping centers and plazas, big-box stores and specialty retailers such as Fry’s Electronics and Cabela’s along the corridor. Cabela’s opened in August in Noblesville.

Fishers Mayor Scott Fadness said he foresees the I-69 corridor becoming the center for commerce in the "very near future." He said Ikea brings a stronger commercial tax base to the city, makes Fishers a more interesting place to visit and increases the overall quality of life for residents.

Richard Feinberg, a Purdue University professor in the department of consumer science, said the Ikea store will draw more retailers to the area.

“Not that Fishers is hurting for any retail growth or residential growth, but a whole slew of entertainment venues and retail venues will grow,” he said.

“They like to go where consumers are, and an Ikea attracts millions of consumers not only from a local area but from the 200-mile radius around it.”

Mo Merhoff, president of OneZone, the chamber of commerce for Carmel and Fishers, said the Ikea store will give Fishers a bigger “footprint.”

“I think that there are businesses that come into a community that bolster and help create more jobs, and then there are game-changer kind of entries in a city. Ikea is one of those. Maybe Cabela’s falls into that, too.”

The Fishers City Council will vote on the proposed project as early as next week. Fadness said the city is considering a waiver of permit impact fees but expects no use of tax abatements or tax increment financing.

Joseph Roth, public affairs manager for Ikea, said the retailer chose Fishers for the Indianapolis-area location because of its easy access to the highway.

"Ikea typically looks for 25 to 35 acres of land with good visibility to a major interstate," he said. "And as we were looking for what was available, all of our searches came back to Fishers."

The Ikea announcement was made Tuesday morning at the Fishers City Hall auditorium.

At 296,000 square feet, the Fishers store would be about a midsize location for the company. Roth said the stores tend to fall within the 250,000- to 350,000-square-foot range.

The store in West Chester, Ohio, a Cincinnati suburb, is 344,000 square feet. The Chicago-suburb Ikea in Bolingbrook, Illinois, is 310,000 square feet. The store in Schaumburg, Illinois, is the largest in the U.S. at 450,000 square feet.

Roth said those stores, the closet to Indianapolis, were built larger to also serve the number of people traveling from Central Indiana to buy things from Ikea.

The company expects to hire about 250 employees for the Fishers store. Ikea prides itself on providing livable wages and competitive benefits packages, Roth said.

Fadness agreed.

"Ikea is very progressive in their benefits package, more so than any other company I’ve ever seen," he said. "You can work 20 hours a week with full health benefits, which is extraordinary, particularly in the retail business where benefits are a scarcity."

The company expects to begin the hiring process, through online applications, six to nine months before the grand opening.

The arrival of such a popular retailer does bring some concerns, though.

Fadness acknowledged traffic fears of some residents. He said road improvements and the store’s 10 a.m. opening, after rush hour, should help.

Feinberg, the Purdue professor, noted the threat Ikea poses to other furniture retailers in the area.

He said the furniture business has dipped in the past few years. Furniture stores have been closing as Ikea continues to grow. He cited the brand's merchandising, furniture design and customer service.

"Ikea does what it does really, really well," he said. "They are the world's largest furniture retailer, and that's not by chance."

The owner of Best of What’s Around, a furniture antique store just across the interchange at 8745 E. 116th St., said she isn’t worried.

Danie Leever said the items she sells have better quality and last longer than the typical Ikea brand items.

"I hear all day long in the shop in terms of the quality and durability of it," she said. "It's already lasted the tests of time."

The Fishers Ikea opening is part of an aggressive growth push by the retailer in the United States and other countries.

Founded in 1943 in Sweden, Ikea didn’t open its first U.S. store until 1985, near Philadelphia. With its 41st U.S. store opening in St. Louis, Ikea is expanding at a 12 percent rate through 2017.

The company’s U.S. sales have more than doubled in the past 10 years.

The growth is key to the company’s low-cost operations that are based on selling low-priced items in volume. With the growth comes a better ability to reduce prices further.

Ikea has an almost cult following among customers with its quirky ways of doing business, its low prices, self-assembled furniture and Swedish themes. All of its stores serve and sell Swedish foods, such as potatoes and meatballs and lingonberry juice and jam. Its free loyalty cards entitle the users to special discounts. Stores also hold child play areas.

The Fishers store is likely to contain numerous energy-efficient features that are Ikea trademarks, such as skylights, water-conserving restrooms and energy-efficient lighting. About 90 percent of its stores hold solar energy arrays on their roofs. The company also owns two U.S. solar farms.

Although one of the world’s most-known brands, Ikea is something of a corporate mystery itself. It’s actually a collection of privately owned companies, tied together by a complex corporate structure and controlled by foundations based in the Netherlands, Luxembourg and Liechtenstein, according to recent media accounts. The structure allows the company to reduce corporate taxes, which has opened it up to criticism for tax-dodging.

Ikea’s founder, Ingvar Kamprad, one of the world’s richest people, continues to wield control over the company. He gave his initials to the company’s name, with the E and A coming from the names of his family farm and Swedish hometown.

Kamprad started out selling a modest product line of fish, vegetable seed and magazines. Now the chain includes more than 370 company and franchised stores in 47 countries.

Indianapolis residents recently highlighted Ikea as one of their most sought-after franchises for the area.

In a couple of years Indianapolis area customers will be able to fill their SUVs with Astrid table lamps ($19.99) or the Billy/Oxburg bookcase, which comes in 14 packages ($664.97).

"I'm really encouraged,” Fadness said, “by the amount of couples' skill-building that will occur."

Star reporters Madeline Buckley, Chris Sikich and Jeff Swiatek contributed to this article. Call Star reporter Olivia Lewis at (317) 444-6126. Follow her on Twitter: @TheWrittenPeace.