IKEA to open store in downtown San Francisco this month, defying retail exodus

IKEA, the global furniture giant, will open a store in downtown San Francisco later this month, the company announced on Tuesday, defying an onrush of retail departures that has slammed the city center in recent years.

Located blocks away from the city's Union Square retail hub, the store will anchor a new mall owned by Ingka Centres, an IKEA-affiliated developer that seeks to drive shopping traffic toward company stores.

The new, sprawling three-story store will span a combined 52,000 square feet, featuring 27 fully-furnished room displays tailored for city dwellers, IKEA said.

The announcement bucks a trend of retailers exiting downtown San Francisco.

In recent months, a slew of closures of retail stores in San Francisco doubles as a roundup of well-known shopping brands: Whole Foods, Old Navy and Nordstrom, among others.

In June, the 70-store downtown Westfield Mall said it would stop making payments on a $558 million loan, relinquishing ownership of the shopping center and leaving the fate of the complex uncertain.

Nearly half of the stores in the city's downtown shopping district have closed since 2019, the San Francisco Standard found in May.

The series of store departures has spurred criticism focused on crime and homelessness but a more complicated set of forces is driving companies away from the city, experts and a former downtown store owner previously told ABC News.

They pointed to sluggish sales at some stores due in part to a longstanding shift away from brick-and-mortar retail that went into overdrive during the pandemic, they added. The rise of remote work -- a trend even more pronounced in the Bay Area's tech industry -- also has slashed the number of office commuters downtown, they said.

Despite the trend, IKEA San Francisco Market Manager Arda Akalin voiced optimism about the store opening in a statement.

"We are so excited to open the doors of our new IKEA store to our neighbors in the San Francisco area," Akalin said on Tuesday. "We appreciate the excitement and support from the community and can't wait for our customers to experience the new store full of affordable home furnishings and solutions that reflect who San Franciscans are and how they live."

In a statement to ABC News, San Francisco Mayor London Breed celebrated the new IKEA store.

"The arrival of IKEA on Market Street is a tremendous boost for our City that will bring more shopping, jobs, and excitement to the Union Square area," Breed said. "We have been working closely with IKEA to make this a successful opening and we will continue to work to make the area clean, safe, and welcoming for all."

"We know the future of Downtown will look different, but we also know that San Francisco is a resilient city that embraces change and is always working to build what comes next. We are proud to welcome IKEA to be part of that future," Breed added.

In June, Breed told Good Morning America that San Francisco faces difficulties but she also faulted a disproportionate focus on exits from the city.

"San Francisco is a major city and it has challenges," Breed said. "But let's back up a little bit. You are talking about people who are leaving the city but not the people who are staying, expanding, coming to San Francisco."

The San Francisco area already plays host to two IKEA stores, the company said. A store in nearby Emeryville, California, opened in 2000; and a store in East Palo Alto followed in 2003.

The forthcoming store in downtown San Francisco will open on Aug. 23.

"On grand opening day, IKEA customers can enjoy games, workshops, giveaways," the company said.