BUSINESS ATTRACTION
The Big Deal Why the battle for IKEA’s new Atlantic Canada store was over before it started By Stephen Kimber
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Date:16-04-20 Page: 119.p1.pdf consumers in the Halifax area, but it’s also in the crosshairs of a web of major highways that lead to and from every populated nook and cranny in Nova Scotia, not to forget New Brunswick and Prince Edward Island, making it a potential shopping destination for close to two million Maritimers. No wonder its 500-acre site already boasts 1.3 million square feet of shopaholic heaven with over 100 retailers and services, including five of those anchor-type destinations: Walmart, Home Depot, Costco, Canadian Tire and Cineplex Cinemas. Glenn Munro was apologetic. I’d been All it needed was an IKEA. calling and emailing him to follow up on January’s announcement that IKEA — the iconic Swedish furniture retailer with 370 stores and $46.6 billion in sales worldwide y now, the IKEA creation last year — would build a gigantic (for us story has morphed into myth: Bin 1947, Ingvar Kamprad, at least) $100-million, 328,000-square- an eccentric, dyslexic 17-year-old foot retail store in Dartmouth Crossing. He Swedish farm boy, launched a mail-order company called IKEA. hadn’t responded. He’d invented the name using his initials and his home district. Soon after, he also invented the “flat I wanted to know how and why pack” to more efficiently package IKEA had settled on Halifax and and ship his modernist build-it- not, say, Moncton as the site for 328,000 yourself furniture. In 1953, he the first of a dozen new Canadian opened his first store, then another stores it plans to open over the next square feet Size of IKEA’s new and another, expanding into decade. Munro, the Montreal-based Norway and Denmark, then Europe vice president of both Dartmouth $100-million retail store and… the rest is history still in the Crossing Ltd. and its parent North in Dartmouth Crossing making. American Development Group, Now 90, Kamprad is guesstimated seemed like the right person to ask. to rank somewhere between “It’s been my baby since day first and eleventh on your pick of one,” he’d happily told CBC TV Nova artmouth Crossing is what’s known as a “power centre,” world’s-richest lists. His wealth Scotia host Bob Murphy the day can only be estimated, however, IKEA announced its plans. Dwhich is what folks who know call those sprawling, open- since IKEA has a reputation for Now he wasn’t so eager to talk; secrecy and for what are delicately perhaps famously secretive-for- air destination shopping “cities” that have become our twenty- described as “opaque business the-sake-of-being-secret IKEA practices… operating with a web- had clamped a lid on even friendly first-century shopping centres. Power centres are usually anchored like network of holding companies, outsiders making un-vetted owners, and subsidiaries.” comments about corporate business. by three or more standalone big box stores, sprinkled among any The Ministers of the European Munro offered instead to put me Parliament claim that was designed, in touch with someone at IKEA number of multi-specialty-tenant buildings and awash in acres of in part at least, to avoid more than who’d been involved in the locating €1 billion in taxes over the past six process, who would “probably” pass free parking. The power centre that is years. In February, the ministers me along to the corporate public demanded an official investigation relations department. That someone Dartmouth Crossing has been pushing out and up from the edge into the company’s tax practices. did. None of that has slowed IKEA’s While I waited for answers to my of Nova Scotia Highway 118 for close to a decade. It is not only growth. Last year, it reported an questions, I did some due diligence 11.2 per cent increase in sales over of my own. located conveniently cheek by jowl to 400,000 or so potential the year before as it continued
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Date:16-04-20 Page: 120.p1.pdf “growing in almost all our markets,” including in its two most rapidly Make your dream expanding territories: China and home a reality. Russia. The furniture retailer’s individual stores continue to get ever larger too: the current largest, AVAILABLE near Seoul, South Korea, opened FINEST WOOD last year “with a sales space nearly as big as the Louvre museum.” Perhaps that’s understandable, given that the retailer stocks more than 12,000 sofas, beds, desks, kitchen faucets and assorted homey knickknacks. Canadians buy a lot of them. In 2014-15, IKEA’s Canadian sales rose more than 10 per cent to $1.79 CRAFTED WITH TIMELESS billion; online sales jumped 40 per BEAUTY cent. One of Stefan Sjöstrand’s first assignments after he was appointed IKEA Canada’s president in 2014, in fact, was to “make IKEA more Please take accessible for Canadians… When we really dug into it… we could see that the potential is here a seat. for us.” In November 2015, IKEA The meeting is about to begin! Canada announced it would open Dangle your legs off a paddleboard, 12 new stores by 2025, doubling the number of its outlets here. “We hop in a golf cart, or pull up a comfy are going to expand from coast to log at the beachside mussel bake. coast,” Sjöstrand declared. “We’re Why settle for a chair when you going to expand in new cities, and can brainstorm from a yoga mat, we’re going to expand in existing or surrounded by paint at our popular cities.” Brush with Good Cheer sessions. Coast to coast? New cities? It We’ve been ‘chairing’ meetings was time to dream. Again. differently at White Point for over 25 years – when we opened our LOVE YOU WILL first official conference facility. A HOME Since then, we’ve become synonymous with unique, rejuvenating, and memorable business gatherings. KEA’s January 22, 2016 Call Anne today and start thinking announcement that it had bike seat, kayak, sauna bench, decided to return to Halifax was I or your favourite bar stool in not only a bigtime business brag for Dartmouth Crossing, but it also the Founder’s Lounge. served as a long-sought personal from vindication for many Halifax consumers. $129 “I got mail from the people living all-inclusive Call us at Dow & Duggan in Halifax, in Nova Scotia, asking meeting Log Homes International today. us to open up a store in the area,” package Sjöstrand explained at the news PPDO. Plus tax & gratuity. conference, “and I’m very thrilled to be able to make this announcement for the people living here.” Why is IKEA such a big deal? Let’s start with “return.” In 1975, IKEA — by then already (902)852-2559 a household name in Europe, thanks to its stylish, low-cost, whitepoint.com www.dowandduggan.ca
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Date:16-04-20 Page: 121.p1.pdf deliver them to consumers in the Moncton’s charms and inviting Maritimes. At its peak, MyBoxBuyer the company to consider the area. 1947 had 20 employees shuffling When he posted his invitation Year that 17-year-old between here and there. online, more than 400 people Swedish farm boy Ingvar Now, there will finally be an signed on in support. actual IKEA store in Halifax again. LeBlanc received a polite, but Kamprad launched a But why here? In Halifax? Why non-committal response from the mail-order company not in Moncton? company, “saying our letter would called IKEA Moncton, Halifax’s primary be sent along to the appropriate and sometimes bitter rival for people for consideration.” regional commercial and economic A month later, Sjöstrand, supremacy, bills itself as the hub of surrounded by beaming Halifax assemble-it-yourself furniture and the Maritimes. It has used its more city officials — including Mayor quirkily iconoclastic marketing — central geographic location — not Mike Savage, Deputy Mayor Matt decided to dip its toe in the North to forget its geographic proximity Whitman, MLA Joachim Stroink, American retail market by opening to Maine and its additional MP Darren Fisher and a host of its first modest retail operation in population of over one million other grinning councillors and Dartmouth’s Burnside Industrial people — to attract everything local business lights — were cutting Park. The store was small but it from big-name rock concerts and ribbons in Halifax. was a huge success, attracting the city’s then-still-young, family- building, home-owning baby “IKEA coming to Halifax. boomers and university students. Full store. Up yours For Haligonians, our brief moment as “North America’s only” became a Moncton!” matter of local pride. We have IKEA. Halifax Twitter user And then suddenly, IKEA was gone, shut down, shuttered, so long, sporting events like last year’s The reality is that Moncton may hejdå. There was never much of FIFA Under-20 Women’s World Cup have been nearly a decade late to an explanation from traditionally to transportation companies and the IKEA game. zipped-lips IKEA. There were international call centres. Two other Which brings us back to Glenn hints the city had withdrawn a big box stores — Cabela’s and Bass Munro. Munro, the managing property tax rebate, but the more Pro Shop — are currently building partner for Eastern Canada at likely explanation was that Halifax Moncton outlets. Why not IKEA? North American Development, simply wasn’t big enough for IKEA’s That was exactly the question is responsible for development grandiose ambitions. local area councillor Andrew strategy for three million square Haligonians begged to differ. LeBlanc asked himself last feet of real estate in the Halifax and But that didn’t matter. After the November after Sjöstrand’s non- Montreal areas. closure, Atlantic Canadians — still specific announcement of IKEA’s When North American opened eager to fill their homes with Canadian growth plans. its Carrefour de la Rive-Sud power everything from Stocksund living “I know my wife really likes centre in Boucherville on the room sofas to Godmorgon bathroom IKEA, and I like some of their stuff, outskirts of Montreal in 2003, sinks and cabinets — had to buy and a lot of our friends do, and I IKEA was one of its big box anchor online and pay for shipping, or thought this is a cool opportunity,” tenants. travel to Montreal or Boston to get LeBlanc told Global News. “We have “It was just a question of time,” their furniture fix. Mike Smith, a space here, we have developers Munro told the CBC. “We’ve Halifax entrepreneur, even created who have land and we certainly been talking with them since a booming boutique business could assist to bring IKEA in.” He [Boucherville], on and off and they called MyBoxBuyer.com, to pick up immediately sat down and wrote a said, when we’re ready, we’ll come orders at Quebec IKEA outlets and personal letter to Sjöstrand, touting and talk to you.”
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Date:16-04-20 Page: 122.p1.pdf Two years later, when North Dartmouth Crossing land that had American first pitched the idea Dartmouth Crossing conveniently been held open for its of Dartmouth Crossing to Halifax arrival. city councillors, it dangled the by the numbers: Deal done. Break out the IKEA possibility IKEA could be part of its 500-acre site Svalka champagne glasses. As one retail mix. 1.3 million sq. ft. Halifax Twitter user tweeted: “IKEA At the time, however, IKEA coming to Halifax. Full store. Up was fully engaged elsewhere, 100+ retailers yours Moncton!” developing a new IKEA in Estimated 2 million Winnipeg. The Winnipeg store was mildly controversial because consumers KEA’s response to my questions? the city and the province About the factors that go into promised $18.5 million worth of Ideciding where it will locate infrastructure improvements to build [Dartmouth Crossing] right,” an IKEA store? About the process lure the retailer there. (For the Munro told the Macdonald Report, that led to the decision to set up in record, Halifax city officials insist a weekly feature publication of Halifax? About whether there are there were “no rebates, tax breaks allnovascotia.com. “This was not studies that show the economic or any other incentives” to entice a short-term play. We designed impact of an IKEA on a community? IKEA to Halifax. And a provincial the park so some day in the future, And so on… spokesperson adds it offered no when someone like IKEA decided Well, after an initial email saying “provincial incentives” either.) to look at the market, there was no the company would be “happy to “We have to do Winnipeg first,” choice but to come to Dartmouth help with what you may need,” no IKEA officials advised Munro in Crossing.” one from IKEA got back to me 2007, “and, after Winnipeg, we’ll It worked. Although IKEA did Did I mention IKEA is known for take a look, take a breather.” its due diligence — it also looked its secrecy? • By 2014 — breather taken and at a shuttered Rona store and an IKEA’s new president in office — undeveloped 200-acre tract in FEEDBACK negotiations “started to heat up.” Halifax’s Bayers Lake park, and * [email protected]; Munro was ready. “We spent probably considered Moncton sites [email protected] more money than we needed to to too — it soon settled on the plot of a @AtlanticBus; @IKEA; #BigDeal
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