x Abu Dhabi, UAEMonday 24 July 2017

Al-Futtaim plans second Ikea for Dubai

IKEA has a second megastore planned for Dubai in 2013.

Omar Al-Futtaim, left, vice chairman of Al-Futtaim, at the new Ikea on Yas Island, with Ahmed Ali al Sayegh, chairman of Aldar Properties.
Omar Al-Futtaim, left, vice chairman of Al-Futtaim, at the new Ikea on Yas Island, with Ahmed Ali al Sayegh, chairman of Aldar Properties.

Residents in Dubai Marina and Jumeirah Lakes Towers may have an Ikea store in the neighbourhood by 2013.

The Swedish home furnishings giant and the retail group Al-Futtaim plans to open another Ikea outlet in the southern part of the emirate, said Mile Franicevic, the general manager of Ikea for the UAE, Qatar and Egypt.

"A lot of the new development in Dubai is going south, the major suburban and residential developments," he said yesterday, as Ikea opened its largest store in the region on Abu Dhabi's Yas Island.

The second Dubai store, planned for the second half of 2013, will be a similar size to the new Abu Dhabi outlet, which measures 33,000 square metres. Dubai's existing store at Festival City would cater to the Northern Emirates and the older areas of Dubai, he said.

Al-Futtaim and Ikea are examining their location options, and it is likely to be a standalone outlet separate from a shopping centre, Mr Franicevic said.

This new outlet will be in addition to the Ikea stores Al-Futtaim has planned for Qatar next year and Egypt in 2013, he said.

Al-Futtaim has said it did not expect the completion of the Cairo store to be affected by the unrest there and transition to a new government.

Furniture and furnishings sales in the UAE reached Dh6 billion (US$1.63bn) last year, representing 14 per cent of total non-grocery sales in the country, data from Euromonitor International show. With expatriates accounting for 85 per cent of the Emirates' population, their need for furnishings upon arrival means this segment represents big business.

While overall UAE sales at Ikea continued to grow when the economic downturn hit in 2009, there was a drop in sales in Dubai after the economic downturn.

Ikea sales growth across the country last year was in single figures, a trend expected to continue this year.

Mr Franicevic said demand in Dubai had been helped by the arrival of new residents.

"While there were people who left in 2008 or 2009, there have also been newcomers to the market," he said. "There are new people in the market. We can see improvements in terms of visitor flow and customer flow."

Al-Futtaim, based in Dubai, which also has the Marks & Spencer (M&S)franchise in the UAE, plans to open at least six new retail outlets across the Emirates this year, said Steve Hammett, the president of its retail division.

A new M&S store is due to open at Deira City Centre at the end of next month and another at Mall of the Emirates this summer, he said.

The company is also likely to open two more M&S outlets before the end of the year. Al-Futtaim also plans to open a Toys R Us in Deira City Centre in the coming months, and possibly at one or two other locations in the Emirates, he said.

"We've got a fair amount of activity this year, particularly when you compare with 2009 and 2010," Mr Hammett said.