Can the new £450 million Ikea flagship save Oxford Street?

Daily Mail​

26-04-2025

This Thursday Peter Jelkeby will do something that will make or break his career and seal the fate of the best-known high street in Europe. He will open a 5,800 sq m, £450 million Ikea store in Oxford Street in central London. 'Oxford Street is still an icon. It's unique. We see potential,' the UK boss of the Swedish homeware giant tells me as he prepares to check that the Billy bookcases and Pokal glasses are freshly dusted and lined up straight, ready for the big day.
Icon? Potential? I wonder if he's had too many meatballs for lunch and needs a little lie down. Exiting Tottenham Court Road tube and heading west earlier, I passed tacky shops selling mini plastic Big Bens, vapes and American hard candy called Jawbreakers. At least three storefronts were boarded up with bailiffs' notices. The M&S I called in at was so old it was almost Soviet.
Even the people whose job it is to talk up the nation's high street concede there has been decline. 'We were getting a poor reputation,' says Dee Corsi, the CEO of New West End Company, which represents local businesses. Others have used stronger words. After the demise of Topshop, which drew shoppers from New York, and the collapse of the once-dependable House of Fraser and Debenhams department stores, Stuart Machin, chief executive of Marks & Spencer, predicted that without urgent investment Oxford Street was 'destined for extinction'.
So why is Jelkeby, who blurs the background in his video interviews lest anyone spots an item that isn't from Ikea, beaming like he has won the retail lottery? The 62-year-old Swede senses consumers have maxed out on online shopping – half of Ikea's sales in London are online, more than in any other city in which the retailer operates – and are ready to head back to destination shopping streets. 'People want to try out the sofa, look at the fabric, sit on the chair, look at the surface of a kitchen worktop,' he says.
He will be giving Londoners plenty of new reasons to walk under Ikea's jaunty blue and yellow awning into what was once Topshop. The first thing they will see are 'roomsets curated by Londoners'. He won't say who but, in homage to the building's past – and the stampede she caused when posing in the store windows in a red dress for her first Topshop collection in 2007 – I'm hoping for Kate Moss 's take on an Ikea bedroom (with an en-suite disco). Designers will be on hand to help imagine any room you fancy.
There will be a live demonstration kitchen for cooking events, which are sure to make you hungry enough to head to the 130-seat café called – this being Ikea's European flagship – the Swedish Deli. Six thousand homeware items will be on show, just over half of which you will be able to take away. You can get everything else delivered; or click and collect it later, either in the Oxford Street store or at four other locations in central London. 'It's going to be fun,' Jelkeby promises. (Provided, that is, you can avoid the dreaded checkout queues that can leave Ikea shoppers with PTSD.)
Fun is certainly what Oxford Street needs after a wretched decade. As the big names departed, footfall on the main drag and its environs slumped by a quarter between 2019 and 2024. Now there are signs it might, just might, be recovering some of its swagger.
It is not only Ikea. Corsi, who as a teenager took the tube to Oxford Circus and 'went into all the shops to get the best clothes to show my friends', rattles off the new brands her teenage daughter now visits, or can't wait to when they open: Rituals (cosmetics); Kurt Geiger (shoes); Abercrombie & Fitch (preppy US fashion); HMV (which returned to the site of its original store in 2023); Superdry (whose flagship is opposite Bond Street tube); Space NK (beauty); Puma (athleisure and sports); Under Armour (for sporty types out to look like Anthony Joshua); and Mango (Spanish style for those who consider Zara too common).
There are more openings than just new shops. The reassuringly expensive Third Space fitness chain is launching a 2,800 sq m gym and spa in Elephant – the new name for the former House of Fraser site, currently undergoing a £132 million redevelopment. Crazy-golf-for-drunk-people outfit Swingers has putted its way into the building formerly occupied by BHS, while Moco, a modern art museum, has opened its third European gallery at the Marble Arch end of the street, joining Frameless, an immersive art installation. Today only 60 per cent of what's on offer in Oxford Street is shopping; the rest is made up of experiences, arts and entertainment.
The result of all the new openings is that vacancy rates on Oxford Street dropped to 1.35 per cent at the end of last year – the lowest rate since the first quarter of 2019, figures from Savills show. Prime rents were up by 25 per cent year-on-year in 2024.
The new investors have been attracted by positive structural changes – one that was easily predicted, one a total surprise and one that involved bashing down doors. The completion of the Elizabeth Line has made Oxford Street the best-connected shopping destination in Europe. It has two stations on the new line: Tottenham Court Road and Bond Street. Meanwhile, as firms increasingly abandon WFH, millions of square metres of new office space is being built in and around Oxford Circus. Hundreds of thousands of workers now commute to the area daily. Westminster Council has also clamped down on landlords who sublet premises to tatty souvenir and candy stores. Many landlords were subleasing to avoid liability for business rates – this falls on the tenant – but often occupants failed to pay. 'There were a lot of raids to make it a hostile environment,' says Corsi.
Despite green shoots, nobody is taking recovery for granted. Retailers know more needs to be done. Corsi wants a government rethink on tax-free shopping. Ending the perk for tourists cost West End retailers around £640 million last year, up from £400 million in 2023. 'Visitors do not spend as much as they used to. It is getting worse all the time,' she tells me, adjusting her Prada glasses, which (whisper it) are from Bond Street.
What other West End ploys are retailers betting on? Marks & Spencer's operations director Sacha Berendji, who is behind the upcoming redevelopment of its flagship at Marble Arch after finally getting planning permission to demolish the existing building, hopes tech will help. 'Technology will play a huge part in ensuring customers can shop the way they want.' It's early days but some retailers are experimenting with internet- and AI-enabled smartscreens to help customers to create an entire new wardrobe of styles without so much as leaving the changing room.
Philip Bourchier O'Ferrall – whose name alone entitles him to the glass of wine he is having at 4.30pm when we meet near Centrepoint, to the east end of Oxford Street – wants to see more entertainment and more food. He runs the Outernet, an immersive cultural experience near Tottenham Court Road station, which has become the most visited free public entertainment space in Britain with 70 million visitors last year.
'We need more festivals, more cultural experiences for people to share – everything from Pride to Eid. There aren't enough cafés and restaurants. We need partnerships with small businesses that would not normally get a leg-up, not a new Wetherspoons.' He's putting his own beans on the line, having signed up Bar Italia, the iconic coffee bar in nearby Soho, to open an outlet for the caffeine-deprived in the Outernet.
Perhaps the last word on the vexed question of what is to become of Britain's high street should go to the retailer on it that, more than any other, has reinvented itself to stay relevant. Selfridges could have become a dusty afterthought like most department stores, but has kept innovating, unveiling collaborations with brands as varied as Jellycat and Golden Goose, and partnerships with celebrities such as Usher, who launched a pop-up last month selling merch for his latest tour. There's even a car boot sale in the multistorey car park every May. Maeve Wall, Selfridges' executive director of retail, says, 'You have to change constantly, to create experiences and give people a new reason to come back and make memories. If you stand still you die.'
If Ikea's Jelkeby can repeat Wall's trick, we'll all soon be heading back up West.
A West End story
1864
The first John Lewis store opens at 132 Oxford Street, the same site its flagship still occupies.
1909
US entrepreneur Harry Gordon Selfridge (right) founds Selfridges in the Daniel Burnham-designed hall at 400 Oxford Street.
1930
M&S opens its first Oxford Street store at Orchard House. In 2024, the brand announced it will be demolished and redeveloped.
1940
A single night of the Blitz takes out Selfridges, John Lewis (below), Peter Robinson and Bourne & Hollingsworth.
1959
The first Christmas lights display is installed on Oxford Street.
1960
John Lewis's flagship store is unveiled as a piece of smart modernism, 20 years after the old building perished in the Blitz.
1964
Peter Robinson opens a branch of new brand Topshop at its Oxford Circus site.
2001
The street's oldest department store, DH Evans, rebrands as House of Fraser. In January 2022 it closes its doors.
2021
Topshop's flagship store shuts 57 years after beginning in the basement. An Ikea will take its place.
2023
Music giant HMV returns to its original site at 373 Oxford Street after closing it four years earlier.