Memphis gave IKEA a $9.5 million tax deal. Now IKEA is ditching Memphis.

Memphis loses its only full IKEA store

IKEA announced Feb. 10, 2026, that it will permanently close its Memphis store on May 3. The location at 7900 IKEA Way in Cordova is the only full-size IKEA in Tennessee.

The company said the decision came after a review of market share, business performance, cost structure, and how it uses its physical locations.

After May 3, Tennessee shoppers will need to travel out of state to find a full IKEA.

Memphis got Tennessee’s first IKEA in 2016

The Memphis store opened in December 2016 as the 43rd IKEA in the country.

It drew customers from Tennessee, Mississippi, and Arkansas and served as the state’s only full-size location.

IKEA had plans to open a second store in the Nashville area, but the company dropped those plans in 2018.

Tennessee never got a second location, and now it is losing its first.

IKEA finished a full renovation just last year

IKEA unveiled a complete redesign of the Memphis store on Jan. 15, 2025.

The overhaul touched the showroom, market hall, dining area, and added a new Central Planning Hub for personalized home furnishing help. It was a full grand reopening.

Now, roughly 15 months later, the company says it is shutting the whole thing down. The timing has left many customers and city officials scratching their heads.

City gave IKEA $9.5 million in tax breaks

Back in 2015, Memphis gave IKEA a $9.5 million tax incentive through the local EDGE board. It was the first time the board had ever handed that kind of deal to a retail company.

In exchange, IKEA promised to create 175 full-time jobs with average pay of about $41,000 a year. The tax deal covered 11 years of reduced property tax payments and was set to expire in 2026.

IKEA fell short on jobs and wages

By 2018, IKEA employed 147 people at the Memphis store, which was 28 short of its 175-job promise. The average wage came in at about $36,944, below the $41,000 the company had committed to.

In 2019, IKEA voluntarily gave back two years of its 11-year tax agreement. The PILOT deal was set to expire in 2026, the same year the store is now closing.

Memphis leaders weigh in on the loss

Memphis Mayor Paul Young said he was disappointed and thinking first about the employees and families affected by the closure.

Shelby County Mayor Lee Harris said he was not surprised, calling the original tax deal a mistake. The two leaders agree the workers come first, but differ on what went wrong.

Harris said the IKEA Memphis unveils new store design closure is another example that cities need to be more careful with corporate tax incentive programs.

Workers face layoffs or a long move

IKEA has not said exactly how many employees will lose their jobs. Tax records show the store had close to 150 workers.

The company said it will try to place employees in roles at other IKEA locations, but those stores are not nearby. Workers who do not relocate will receive severance.

The signs were already there: IKEA laid off about 16 employees at the Memphis store in mid-2025 and closed both the customer and employee restaurants.

Trouble had been building for a while

The mid-2025 layoffs were not the only warning sign. IKEA cut the store’s hours as far back as 2018.

The company reduced commercial space and shifted the location toward serving more as a fulfillment center. By the time the closure was announced, the store had already changed considerably from its original format.

The full renovation in early 2025 now looks more like a last attempt to turn things around than a sign of confidence.

Tennessee loses its last full IKEA store

After May 3, Tennessee has no full-size IKEA stores left. A pick-up-only location near Nashville in Antioch exists, but it carries no in-store inventory.

That location sits about 200 miles from Memphis and serves a different market. For Memphis shoppers, the nearest full IKEA will be in Atlanta, roughly 390 miles away.

That is a long drive for a bookcase.

Memphis is part of a bigger IKEA pullback

Memphis is not the only location IKEA has cut. IKEA described the closures as part of a strategic shift toward affordability and sustainability.

The company has also closed smaller Plan and Order Point stores in Arlington, Va.; Alpharetta, Ga.; Long Beach, Calif.; and Southlake, Texas

The company says it is refining its U.S. footprint, not retreating from it, but the Memphis closure is one of the more visible cuts.

IKEA says bigger U.S. investment is coming

IKEA says it is putting about $2.2 billion into the U.S. market, an effort first announced in 2023.

The company opened 14 new-format stores in 2025 and plans more in 2026. New large-format locations are planned for Rockwall, Texas, and Phoenix, Arizona.

The new stores are smaller than traditional IKEAs and focus on planning services, design help, and order pickup rather than full in-store shopping.

Memphis shoppers still have online options

Memphis-area customers can still shop the full IKEA product range online after the store closes.

Home delivery will stay available, and FedEx pick-up points in the Cordova area will continue to operate. IKEA’s online platform also offers planning tools for kitchens, bedrooms, and bathrooms.

The May 3 closing date gives shoppers about two and a half months to make one last trip to the store before it shuts down for good.

This article was created with AI assistance and human editing.

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