North Korea leader Kim Jong Un likes to threaten to destroy South Korea — but that’s not slowing down Ikea


But Ikea Korea looked past the noise of the launch to announce in a press release that its second store in the country would open in October.

The new store, located on the outskirts of Seoul, will be Ikea’s largest globally, with three underground floors and four above ground, supplanting its existing largest store, which is also in the country.

Ikea Korea didn’t respond to emailed requests for comment.

It’s an upbeat announcement from the home furnishing icon, coming amid the increased military tension.

But it’s in line with a general expectation that the latest incident would play out in a similar manner as previous ones.

“Many businesses that have been in South Korea for quite a long time are fairly inured to the almost chronic tension between North Korea and the U.S., Japan and South Korea,” Steve Wilford, Asia-Pacific director for global risk analysis at strategic consultancy Control Risks, said on Tuesday.

“Life has to go on,” he said. “Consumption isn’t crashing.”

Indeed, the tensions don’t appear to have dented South Koreans appetite for Swedish minimalist home furnishings.

The company’s press release on Tuesday said that Ikea Korea sales for fiscal 2017, which ended this month, rose 6 percent year-on-year to 365 billion won ($324.17 million).

Erika Sirimanne, head of home and garden analysis at market research firm Euromonitor, said that, despite the geopolitical pressure, the South Korean market was quite a prize for the retailer.

While Ikea’s core European markets were facing Brexit fallout, housing affordability issues and high youth unemployment, South Korea offers an urbanized, apartment-dwelling population, with a high proportion of single-person households living in cookie-cutter units, she said via email on Tuesday.

She added that the particularly large stores served another purpose: “The restaurant and playgrounds are actually what attracted many Koreans to Ikea in the first place.”

Others saw some reasons for concern.

Nobel Laureate Michael Spence, currently a professor of economics and business at New York University, told CNBC’s “Squawk Box” on Tuesday that, so far, the increased political turbulence hadn’t translated into big economic effects.

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