Furniture retailer IKEA goes more Texan

IKEA is likely the only furniture store in town to promote its “grand reopening” by slashing the price of Swedish meatballs.

IKEA unveiled its $2 million renovation Wednesday that aims to better suit the tastes of Texas consumers. As part of the reopening event, a $4.99 meatball plate is $1 through Monday.

Most retailers in the industry are in the business of selling furniture, while IKEA sells experience — from its bold blue and yellow exterior, the meatballs, a play area for kids and crazy promotional prices, said Ray Allegrezza, editor-in-chief of trade publication Furniture Today.

“The furniture industry has been battered in recent years, but IKEA has fared better than a lot of their competitors,” he noted.

The Houston IKEA at 7901 Katy Freeway has expanded the number of room settings from 38 to 55. Each setting reflects a particular lifestyle — from big suburban family to college student, said store manager Johnny Andersen.

IKEA also has added more “Texas-specific” design elements, including walk-in closets, more storage furniture and elevated king-size beds. The renovated store also offers more country-style furniture. Thirty percent of the Houston store's merchandise is now country style as opposed to contemporary, Andersen said.

“IKEA does a fair amount of adapting to the local market,” said Jerry Epperson, managing partner of Richmond, Va.-based Mann, Armistead & Epperson, investment bankers specializing in the furniture and mattress industries. In recent years, the company also has added softer seating to its upholstery to make it more comfortable for American styles, he said.

Almhult, Sweden-based IKEA is doing more of its production in the U.S. and is looking to expand production in the states even more, Epperson said.

“IKEA is very efficient in its logistics,” Allegrezza said. “If you're a furniture maker, you don't come to them with your design plans — they come to you.”

Within the last year, the Houston IKEA has begun selling appliances including refrigerators, ovens and dishwashers, and they are built to fit IKEA cabinets, Andersen said. IKEA also sells room settings for hair salons and office spaces.

Items at IKEA, which are mostly contemporary, have a distinct point of view, Allegrezza said.

“The furniture there may not become an heirloom,” he said , “but it's not going to break the bank.”

Most IKEA furniture must be assembled, which is one reason why the store's prices are generally “value-priced.”

In Furniture Today's survey of the top 100 furniture stores for sales, published May 24, IKEA is ranked No. 2. IKEA's 2009 sales for furniture, bedding and accessories were $1.97 billion, up 1.3 percent over 2008.

Major expansion

Among the 38 IKEAs in the U.S., the Houston store ranks 13th in sales, Andersen said. The store was 26th two years ago.

Six years ago, the Houston IKEA completed a major expansion after tearing down the existing store. The result was a substantially larger store with twice the number of checkout lanes and three times the number of parking spaces.

“Houston is an extremely competitive environment. I've never seen so many strong local competitors,” Andersen said.

As a whole, the furniture industry is improving, Allegrezza said. Industrywide, year-to-date orders for residential furniture are up 9 percent, “an extremely strong showing” compared with recent years, he said.

Among the shoppers this week in the labyrinthine 300,000-square-foot Houston IKEA was Baytown resident Meagan Jackson, who is furnishing her first apartment. She is moving to Austin to attend Austin Community College as a freshman. She was at the store with parents Darrin and Audra Jackson.

“It's so big,” she said of IKEA, “and everything is set up so nice. You just want to stay here all day.”

She was hunting for light fixtures, mirrors, lamps and possibly a chair.

Plenty of meatballs

The company does not release sales numbers for individual stores, but Andersen did say the Houston IKEA restaurant took in $3.2 million last year, and the Swedish meatball plate accounts for 40 percent of meals sold.

The Houston IKEA gets 1.6 million visitors a year, he said, and on any given weekend day between 6,000 to 7,000 people drop in.

More than 500 of them stood in line Wednesday morning for a free breakfast, one of the store's grand reopening promotions.

david.kaplan@chron.com