Ikea ready to build its new Midwest hub

Ikea is moving ahead with its strategy to expand its footprint in the Midwest by finalizing plans on a massive new distribution center in Illinois.

The retailer has submitted final plans to the City of Joliet, Ill., that would advance the development of its previously approved main Midwestern distribution center.

“We have known for some time now that Joliet was the perfect location for our distribution hub in the Midwest, so we are pleased our Midwestern presence has grown to the point where we need this terminal to be up and running in 2017,” said IKEA U.S. CFO Rob Olson. “We appreciate the City of Joliet’s cooperation and patience that allowed us to plan long-term and reach this point.”

The Swedish company received initial governmental approvals from the city and purchased the land in 2007, in anticipation of an expanded retail presence in the Midwest. City approval of these updated plans would pave the way for proceeding with a building permit application. The company expects to start construction on the facility in autumn, and be fully operational by summer 2017.

Planned on 72 acres at the Laraway Crossings Business Park in Joliet, the approximately 1.4-million-square-foot distribution center would serve the inventory needs of at least 10 IKEA stores throughout the Midwestern U.S., as well as customer fulfillment. This Midwestern warehouse will complement the current distribution network comprised of two distribution centers on the west coast and three on the east. Its central location will allow goods to be received at coastal ports from both Asia and Europe and then transported inland to the Joliet facility.

The facility’s proximity to a nearby railroad intermodal will provide additional long-term transportation options too. Operating this distribution center will eliminate 5,000 tons of CO2 emissions annually, with even more reductions expected via intermodal solutions. This project represents the fourth significant investment by IKEA in the state of Illinois.

Besides the future Joliet distribution center, there are two IKEA stores in the Chicagoland area, one each in Bolingbrook and Schaumburg. And, last year, IKEA announced it was purchasing a 49-turbine wind farm in Hoopeston, Ill., that is on track to be operational this spring.

Ikea operates more than 360 stores in 47 countries, including 40 in the U.S., where there also are 5 operating distribution centers.