STOCKHOLM (Reuters) – IKEA’s shopping centres business hopes to open the doors of its first mall in the United States, in the centre of San Francisco, within a year, pushing ahead with its expansion plans while many retailers are reeling from the coronavirus crisis.

FILE PHOTO: An IKEA furniture store is seen reflected on the facade of a shopping mall owned by IKEA’s malls arm Ingka Centres, on the outskirts of Stockholm, Sweden August 23, 2020. REUTERS/Anna Ringstrom

Ingka Centres, one of the world’s biggest mall owners, told Reuters in May that it was looking to enter the United States, with a focus initially on locations in New York, Los Angeles, San Francisco and Chicago.

“We are in the right spot at the right moment. And there’s been close contact with the city and they really loved to see us coming there,” its general manager Gerard Groener said on Monday.

“We can create value both for the city and the community and for ourselves,” Groener added.

Ingka Centres, a division of Ingka Group which owns most IKEA stores worldwide, last week made its first U.S. real estate purchase, the struggling 6X6 San Francisco city-centre mall that has been empty since its completion in 2016.

Its total investment in the mall, which like its others will be anchored by an IKEA store, will be $260 million including both the acquisition and redevelopment, said Ingka Centres, which has 45 shopping centres in Europe, Russia and China.

Ingka Centres has plans to roughly double that figure across markets as it, alongside the furniture business, shifts towards city-centre from out-of-town locations.

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Groener said Ingka Centres was in active talks with potential real estate sellers in several European cities, with Barcelona, Madrid, Milan, Rome and Berlin on its wish list.

IKEA’s push may provide much-needed support to city centres, where shops are struggling with tough market conditions.

San Francisco mayor London Breed said in an Ingka Centres statement: “The presence of this great retailer in the heart of our city will be transformative for our Mid-Market neighborhood.”

IKEA, which is made up of a number of companies and controlled by foundations, has historically financed its operations with own cash.

“The objective is to keep doing that,” Groener said.

Reporting by Anna Ringstrom; Editing by Helena Soderpalm and Alexander Smith

Via Reuters Finance