Ikea Reaps--While Others Weep--During Big Opening

Retailers across the nation are crying into their cash registers and predicting the bluest of Christmases.

But for officials of the new Ikea furniture store in Burbank, one of the biggest worries has been keeping enough lingonberries and Swedish meatballs in stock to feed the crowd that hit the Scandinavian retailer’s first store west of the Mississippi.

And unsnarling parking jams.

And then there was the matter of the nearby freeway off-ramps that were shut down at times during the six-day grand opening, which ended Monday.

“This was the best opening in terms of visitors that Ikea ever had,” said Rene Hausler, president of Ikea U.S. West.

Riding the wave of one of the biggest advertising campaigns in Los Angeles history, Ikea drew 146,000 customers who spent more than $2 million during the six-day opening. Some customers waited more than an hour to get inside to survey 240,000 square feet of European-style contemporary furniture, accessories, housewares and gift items--a place Ikea billed as “more than a store, better than Disneyland.”

The new store--Ikea’s sixth in the United States and 88th worldwide--brings another large, well-financed player to the Los Angeles home furnishings market, which is the biggest in the United States.

“It’s a wonderful store,” said Victor Pottinger, a Chicago-based pilot for United Airlines. Pottinger walked 40 minutes from his Burbank hotel to do a little Christmas shopping at Ikea on Tuesday--his second visit in the past week.

“I told everybody on the crew about Ikea,” he said.

“It’s too big,” said Pauline King. And the Swedish meatballs “were pretty spicy.” But the Burbank resident has been to Ikea twice so far with out-of-town visitors.

“I dragged her this time,” said her sister, Lorraine Griffith of Cedar Falls, Iowa. Griffith, who bought a few small items, thought Ikea’s merchandise was reasonably priced.

“If you’re into modern decor, it’s good,” she said. “If you’re into antiques and old-fashioned furniture, it’s a bit out of place.”

Ikea, founded more than 40 years ago, carries merchandise ranging from an $8 wooden toy truck to a $995 black leather sofa, all of which is available the same day. Much of the ready-to-assemble furniture comes packed in flat boxes to save on shipping and storage costs and to fit into small cars.

The store is laid out in a maze-like way that funnels customers looking for the exit past 110 room displays. Ikea features a supervised children’s play area, where parents can leave children for up to half an hour, a diaper-changing room with free diapers, a Swedish-themed restaurant and even tape measures for use in the store.

Ikea is targeting customers between 18 and 49, spokeswoman Cynthia Neiman said. An Ikea customer often is furnishing a first apartment or a new home.

The Southern California area has a wealth of young residents, new housing and people who move frequently, said Thomas H. Tashjian, an analyst with Seidler Amdec Securities in Los Angeles. “All of that would do well for Ikea,” he said.

Inevitably, comparisons will be drawn with Stor, a much smaller retailer that also carries European-looking ready-to-assemble furniture at its three stores. In fact, Ikea thought Stor was so similar that the Sweden-based retailer sued Stor, although the suit was settled last year when Stor agreed to make some minor changes.

“There’s actually no battle between Stor and Ikea, at least not now, because we’re in a different trade area,” Hausler said.

Thirty miles away in City of Industry, Stor President James Stadtlander agreed.

“They’re certainly a formidable competitor . . . (but) I think there’s a lot of room in this market for stores,” Stadtlander said. “We’ve been here for a while, and we have a way of doing business that’s very successful for us.”

Stor posted sales of $72.1 million for the 12 months ended July 20. The company noted earlier this year in a prospectus for its initial public offering that Ikea’s presence could cut into sales and might force the company to boost its spending on advertising.

Ikea, the world’s largest furniture retailer, last year had U.S. sales of $169 million with four stores, all in the Northeast, Hausler said.

Analyst Sarah Stack said the market can support both companies but noted that the going could get rougher as the two chains expand.

Stack of Bateman Eichler, Hill Richards has estimated that Stor will open six new outlets in Southern California by March, 1993. The company Tuesday said that it will open a Houston Stor by Spring, 1991.

Ikea is planning a store in Fontana in early 1992. Stores are scheduled to open in Torrance, Orange County and San Francisco by the end of 1993.

“I think they’ll both prosper” because they offer something different from the traditional furniture retailer at reasonable prices, Stack said of the two stores. “There’s probably room in Southern California for more,” she said, adding, “I wouldn’t say a lot more.”

Ikea’s promising opening doesn’t mean that the company is defying the economic odds, Hausler said.

“A recession doesn’t go over without hurting everyone,” Hausler said.

“Of course we can feel it in our older stores, compared to last year,” the Swede said. “When you look at the overall picture, we’ve seen a downturn, but I don’t think we’re hurt as hard as other retailers.”

Although Ikea’s opening made a big splash, the company is counting on bringing customers back again and again, spokeswoman Cynthia Neiman said.

Maybe Evangelina Carrillo is one.

“I see a lot of things here,” the San Fernando resident said. “I’m going to be back.”