WHEN the first Ikea managers transferred to Ireland at the turn of 2006, they came with a glorious dream. Not only were they hoping to open two stores on the same day, a world first for Ikea, they were also playing for a share of arguably the most buoyant homewares market in the world.

On Monday, the vision of two Ikea stores on the island of Ireland will finally be realised, but the circumstances are a far cry from the heady aspirations of just three years ago.

Ikea's Belfast store has been open 19 months now, with planning scraps in the Republic having long dashed hopes of the historic simultaneous openings.

A far bigger concern, however, is the obliteration of the buoyant Irish market Ikea hoped to cash in on.

In 2006 when plans for the Dublin store were on the drawing board, Irish house completions for the year came in at more than 88,000. This year, predictions of 30,000 are billed as optimistic.

The collapse in home building, coupled with the severest recession in the western world, has decimated the homewares trade.

Sales

Sales of furniture and lighting dropped 18.5pc last year; the latest figures show the year-on-year collapse was running at 36pc by May.

The Swedes will finally get their second store on Monday, but many are wondering if they should still even want it.

And if Ikea can still make the numbers stack up and extract their market share, what of the cost to Ireland's already-embattled homewares players?

Based in Ireland for the last three and a half years, Ikea Dublin boss Garry Deakin has had a front row seat to the spectacular implosion of the local economy.

In Belfast, business was going "incredibly well" until six or seven months ago when "the bubble burst and we began seeing medium growth more than great growth", he says candidly.

Belfast's growth is set to become slower still once the Dublin store opens. Shoppers from the Republic make up 18 to 21pc of Belfast's footfall and 22 to 25pc of its sales, and two thirds of those buyers are expected to migrate to Dublin.

Expectations

Down south, the economic collapse has tempered expectations for the Ballymun store.

Original hopes of 2.8m visitors in the first year have been revised to 2.4m, sales expectations are down "15 to 20pc" in volume terms and "more than that" in value terms, Deakin says, since people tend to defer "big ticket items" in recessionary times.

"If you were there today and you had the landbank [in Ballymun], you might want to reconsider [developing]," admits Deakin.

Since building on Ikea's €20m site kicked off in August 2007, when all still looked rosy, the Swedes never got to weigh the option of developing the store in recessionary times.

But Deakin quickly adds that he "has a feeling" Ikea would have gone ahead with the project even if the economic collapse had already begun.

"Ikea goes for long plays, we went into Russia when we knew it would have been easier to go in 10 years later," he says.

"We're looking at things on a 10, 20, 30 year horizon, we've got the right site in Ireland, if, God forbid, we don't make a profit in year one, that won't be a problem."

Russia is an interesting Ikea example -- the Swedes boldly ploughed into the market in 2000 but have recently halted all investment there blaming the "unpredictability of administrative processes".

Swings and roundabouts with the planning authorities aside, the administrative process is billed as the least of Ikea's problems in the Irish market.

Competitors argue the Irish consumers won't have the "patience" to trek around the vast store and assemble Ikea's flat-pack offerings, and industry sources point out that the discount-shy Ikea will have a hard time convincing the public of its value when everyone else is offering 50pc off.

Others suggest Ikea has vastly under-estimated the scale of the collapse by paring back their targets to the tune of 12-15pc, in a market that's falling more than twice as fast.

Argument

Deakin is quick to dismiss the argument about Irish consumers' patience levels. "We've 300 stores in 35 countries, I'd be very surprised if this country is so different from the rest," says the Briton. "And Irish people already have the patience for it in Belfast."

Irish Business and Employers' Confederation's (IBEC) head of Retail Ireland Torlach Denihan, who represents big furniture players like Argos, Dunnes and Woodies, agrees with Deakin, as does UK retail expert Neil Saunders of Verdict Consulting.

The pervasiveness of "sales" in the Irish market provokes a more considered response. While Irish furniture stores seem to have affixed a permanent "50pc off" sign to their windows, Ikea's idea of a sale is 15pc off a tiny percentage of their stock a couple of times a year.

"I'd be amazed if you saw half-price mattresses somewhere else that were cheaper than full price ones in Ikea," says Deakin. "But you will have some people who see a sofa marked down from €1,000 to €500 and buy it because they think they've saved €500, and they won't get that sense in Ikea.

"We were a bit nervous about that going into Belfast, but it hasn't been much of an issue."

The idea that Ikea's 12-15pc cuts to Irish forecasts are "out of touch" with a market that's falling at close to 40pc provokes a sharp intake of breath.

"We won't touch that [the 40pc falls]," Deakin says. "I'd be totally shocked if in a year's time we were even 30pc off where we originally wanted to be. I'd be devastated."

Ikea will outperform the market, Deakin says, "because our whole concept is based around low price, so we don't get hit as hard as others in a recession".

It's classic economic theory and the broad theme is supported by Verdict's Saunders and plenty of others, but experience hasn't always been so kind to the Swedish giant.

Ikea has already shed 5,000 of its 120,000 world-wide jobs this year, a few weeks ago the company's 83-year-old founder admitted "it will be necessary to do significantly more on the staff side".

The cuts mark the first major retrenchment in Ikea's 58-year history. "It is absolutely necessary in order to adjust our costs and our capacity to meet demand, which is much lower than we had expected," Ikea CEO Anders Dahlvig told a Swedish newspaper back in June. "The force of the economic downturn has clearly surprised us."

Bullish

Back in Dublin, Deakin remains bullish, emboldened no doubt by Ireland's decade-long pursuit of its very own Ikea.

Capturing those eager punters and building market share is the name of the game for year one. Deakin won't talk numbers but warns "there are some areas where our competitors are very weak that we'll be exploiting and targeting very high market shares".

Saunders agrees that there's a market for the Swedes' taking in Dublin. "Ikea will grow, but they'll do that by taking sales from somebody else," he predicts.

"For smaller Irish players it's going to be very difficult to compete with Ikea on price, because Ikea has such massive economies of scale. They also have so much under one roof that they can divert a lot of footfall away from other shops.

"There's going to be a lot of pressure."

It's a threat existing players are very much aware of. More than 80 furniture and interior design companies have already gone to the wall this year and fears Ikea will add to the bodycount are rampant.

In the bigger leagues, industry sources describe how multiples have already begun tailoring their offers to deal with the competition, with one recently vowing to only sell cushions under the €10 mark.

Publicly, though, they underplay the threat. "Ikea is a big player coming in, so of course our members are going to adjust their strategies," says Ibec's Denihan. "But they have far bigger things to worry about than the arrival of another retailer."

Grafton Group's local DIY offsprings, Woodies and Atlantic Homecare, are quick to point out that flat-pack only accounts for 1pc of their business, while just 10-12pc of their total product range competes with Ikea.

"We are always adjusting and innovating to attract business and our 41 locations are ideally placed around the country to give people quality and good value product without taking a day out of their lives," Woodies' boss Ray Coleman adds in a thinly-veiled dig at the newcomer.

Des Kelly, owner and founder of the Des Kelly Interiors chain, is more blunt. "I've been in business for more than 35 years and I'm not afraid of anyone including Ikea," he says. "They won't take the bread off my table, I won't allow it."

He adds that he has a loyal customer base who know to come to him for the lowest prices and the best quality. "We're not going anywhere," he adds.

Alan Prendergast, one of the duo behind Dublin's Bargaintown, is similarly confident of his ability to fend off Ikea's competitive advances. "We've been here 50 years and if we need to batten down the hatches we will," he says. "We'd say to them 'cead mile failte', you've got friends and admirers in Bargaintown."

In the big player leagues, Argos is believed to be one of the most vulnerable since there's considerable overlap between the type of products it offers and those offered by Ikea.

"While I'm sure we'll be keeping a keen eye on how Ikea performs, we never comment on new competitors to market or our future strategy in this context," a spokesman said.

Small family-owned businesses are also believed to be at risk. "Ikea is a particular worry for our people at the lower end of the market," says Mark Fielding, head of business lobby group Irish Small and Medium Enterprises.

"They're finding it very tough going as it is and Ikea is only going to make things more difficult."

Margaret Killane runs her family's 40-year-old Killane's furniture in Lusk, north county Dublin. "Business is very bad, and of course we'd be concerned about Ikea," she says, speaking as she marks 25pc off her stock. "It will have a big impact initially, but all we can do is give good service and keep prices as low as we can."