Furniture retailer Ikea India on Thursday said it will shut down its store in Mumbai’s R City Mall by the middle of this year and explore omnichannel formats in the city.
The store at R City Mall, which is spread across 72,000 sq ft, opened in June 2022 to test the viability of small-format stores.
The company’s plan to shut down the store illustrates the concerns surrounding the viability of running a small-format store, given the rising rentals.
In the R City store, the company has not been able to provide customers the complete Ikea experience due to limitations in layout, design, and location, a source said.
Mumbai is a key market for Ikea in India, and it will continue to invest in the market to reach several customers across Mumbai and other parts of Maharashtra, the source said.
All our other units in India remain unaffected and will continue to deliver the best experience to its customers, the source added.
Going forward, the Swedish retailer plans to open a store in Pune and ramp up its online presence across Maharashtra.
“This strategic decision is at the back of the learnings we have had in terms of customer experience and aligned to our vision of creating a leaner and faster retail business in the country.
"It allows us to consolidate our Mumbai operations to Ikea Worli, Ikea Navi Mumbai, and our online presence while exploring newer opportunities for future growth,” Ikea said in a statement.
“The focus on Mumbai remains robust as we explore newer omnichannel formats for the city,” it said.
The furniture retailer currently employs 100 employees at its R City store and all those employees will be offered other opportunities in Mumbai and its other units.
According to an industry source, Ikea India is conducting trials with city formats.
At present, Ikea India operates three big-format stores in Hyderabad, Navi Mumbai, and Bengaluru, and two city stores in Mumbai.
