IKEA, cities and retail after Verona's "no"

IKEA
18 Apr 2019

Ikea is the main furniture seller in Italy. In 2017 it amassed €1.8b in revenues (1.3% increase from 2016), closely followed by Edil Tre Costruzioni (Mondo Convenienza) with €1.1b (5.8% increase).

A stop to the project

In the past days, Ikea formally announced the decision to refuse the project of a proprietary site and mall in “Marangona”, South-East of Verona.

The ambitious project was announced in 2015. It required an area of 280 metres squared, even a slip road to the Statale 12 was planned for 14 million Euros. “Tiare”, the only mall in Friuli-Venezia Giulia and the first in Italy to have a store Ikea, in Gorizia was used as a model.

Estimates predicted 1000 new jobs and a yearly revenue of 250 million euros. Ikea limited its investment to create a project for a mall of 80,000 square metres, approximately triple the size of the mall Adigeo. According to Ikea, without a shopping hub the single furniture store was not justified.

The reasons

Things get complicated. To approve the project, regional laws regarding urbanisation and commerce would have to be changed; another issue was presented by standard consumption laws regarding private property.

Last summer, an alternative plan was draw: next to the furniture selling point, a smaller mall about half size smaller of the 80,000 metres squared original project. In addittion, a new sports hall for 12,000 people was ideated, but it did not suffice.

“Unfortunately, the uncertainty in past months did not create the conditions to proceed with such a vast investment”. In the communicated speach from Ikea, a reference to the “greatest strategic valuations made at an international level”.

Politics

The lost opportunity lead to a political clash between old and new administrations. Accentuated by the discussion at Congress among the families held at Verona, opposed by Ikea with a TV commercial.

However, the main failure reasons are still on the table. The province of Verona counts less than a million people: with its centre at Marangona, the impact would have been unbearable for other malls in the areas and for the small shops left in the surrounding. The predicted visitor fux (10.5 million) and of cars (4.5 million) would have brought the whole zone to urban collapse.

This has caused everyone to question the fundamental necessity for such an ambitious project: the balance between territory, economics and social structure.

 

According to your interests: "Malls, at the end of one race another begins".