Ikea closes a Swedish store for the first time in more than 40 years, as the furniture group prepares to shut its large Borlänge outlet and replace it with a smaller format inside the Kupolen shopping centre in 2027. The decision reflects a broader shift in Nordic retail, where online sales and changing customer habits are pushing even established brands to rethink the role of large out-of-town stores.
Ikea closure in Borlänge marks a rare Swedish retreat
Ikea Sweden has confirmed that its current store in Borlänge, in Dalarna, will remain open until the move to new premises in 2027. The company says the new location will open in the first half of that year and will be designed as a smaller store format, adapted to what it describes as the future retail landscape.
The decision is unusual in the Swedish market. According to Swedish business daily Dagens Industri, cited by SVT, it is the first time in more than four decades that Ikea has closed a store in Sweden. The Borlänge store is also relatively new by Ikea standards: it opened in 2013, after years of local negotiations and planning.
Ikea is not leaving Borlänge altogether. Instead, the company will move into Kupolen, a shopping centre located near the current retail area. Ikea’s Swedish newsroom described the change as a new shopping experience for the city, with a format intended to be more accessible and better suited to the size of the local market.
Smaller Ikea format follows changing customer habits
The company links the move to a structural change in how customers shop. Ikea Sweden said more than 20 percent of its sales now come from online channels, while many customers begin their purchase journey digitally before visiting a store or arranging delivery.
That shift matters for a retailer historically associated with large warehouse-style stores, full-room displays and self-service furniture collection. In Borlänge, Ikea argues that a smaller format can still offer home furnishing solutions, inspiration and food, while requiring less physical space than the existing store.
Michael Parker, acting CEO of Ikea Sweden, said the company sees Borlänge as an important market and wants to offer customers a store “designed for the future”. The new format, he said, builds on lessons from more accessible Ikea stores already tested in Sweden and elsewhere in the Ikea group.
The decision also comes after a period of cost pressure within the company. Swedish media have linked the Borlänge announcement to wider savings measures across Ikea, including recent staff reductions. The company has framed the local move mainly as an adaptation to customer behaviour, rather than a withdrawal from the region.
Around 230 employees face uncertainty before 2027
The Borlänge store currently has around 230 employees, but Ikea has not said how many jobs will remain after the move. The company told SVT that a smaller store generally needs fewer staff, while stressing that the process is still at an early stage.
Louise Ridell Ehinger, Ikea’s press contact, said the company does not yet have all the answers on staffing. Ikea has also said it wanted employees, partners and the municipality to receive information directly from the company before the decision became public.
For workers, however, the key question remains unresolved: how many roles will be affected, and whether employees can be transferred into the new store format or other Ikea operations. The long transition period, with the current store expected to stay open until 2027, gives the company time to negotiate and plan, but it also prolongs uncertainty for staff.
Borlänge municipality criticises the short notice
The announcement has also caused political frustration in Borlänge. Erik Nises, the Social Democratic chair of the municipal executive board, told SVT that the municipality was informed only shortly before the decision became public. He said the local authority had invested significant time and resources to enable Ikea’s establishment in Norra Backa, where the store opened in 2013.
Nises said the municipality would review existing agreements with Ikea. His criticism does not concern only the business decision itself, but also the way it was communicated to local authorities in a city where Ikea is a major employer and an important part of the commercial landscape.
The episode highlights a recurring tension in Nordic local economies. Large retail investments can reshape transport, planning and employment around a specific site. When a major company later changes format, municipalities are left to assess the consequences for jobs, land use and local commerce.
Sweden’s retail model adjusts to digital shopping
The Borlänge case is not simply a local story about one Ikea store. It is part of a wider transformation in Swedish and Nordic retail, where physical shops remain important but must increasingly work alongside digital sales, click-and-collect systems and smaller urban or semi-urban formats.
For Ikea, the move suggests that the traditional large-store model is no longer the only answer, even in its home market. For Borlänge, the result will be mixed: the city keeps Ikea, but in a reduced format, with fewer guarantees for employment and a different relationship between the company, local authorities and customers.
The next phase will depend on how Ikea manages the transition before 2027. The company will need to define the new store’s services, clarify the impact on employees and maintain customer access in a region where the brand has become part of the local retail identity. For Sweden, the closure marks a symbolic moment: even one of the country’s most recognisable companies is adapting its physical footprint to a market increasingly shaped by online shopping.
