Photo by Sam Dean | The Roanoke Times

Conveyors move furniture pieces at Swedwood's plant in Danville.

DANVILLE -- When trendy Swedish furniture retailer, IKEA, announced that it was landing a factory in Danville, a burning question bubbled up: Will it open a store?

Unfortunately, for fans of this retailer's contemporary lamps, sofas, beds and pillows, the answer is "No."

But this story has a "Yes" factor.

The plant, called Swedwood, is pumping life into a slumping furniture and textile sector in Southside Virginia, where some manufacturers have shuttered operations and thousands of jobs have been lost in the past few years.

The Danville metropolitan area's unemployment rate, which includes Pittsylvania County, was the highest in the state, according to the Virginia Employment Commission. The March unemployment rate of 7.4 percent was nearly twice that of the entire state (3.9 percent).

Swedwood, the industrial arm of IKEA Group, has hired more than 150 employees for the 930,000-square-foot factory at Cane Creek Centre, an industrial park near the Danville Regional Airport, where production began in February.

Eventually, it expects to hire about 800 employees to operate three additional factories at the site, where Sweden's blue and white flag flies high.

Furniture retailers and manufacturers have not been the subjects of this kind of success story. Nationally and in parts of Virginia, this industry has faltered under competition from cheap imports and slow consumer spending.

In March in Southwest Virginia, Vaughan Furniture in Galax announced that it would lay off 275 employees when it closes its plant.

And last year, Hooker Furniture in Martinsville, Stanley Furniture in Henry County and others shut down operations.

IKEA has emerged as a successful force in the global furniture retailing industry, choosing Danville as the spot for its only United States Swedwood plant.

Reinventing Danville

The southern tip of Virginia was an attractive region for Swedwood, its 37th location worldwide, because of the area's labor pool of manufacturing talent, a ready site for building and a location central to the East Coast.

Danville Economic Development Director Jeremy Stratton called the Swedwood facility a "wonderful opportunity for the city and county."

The demise of Dan River Mills several years ago, a textile manufacturer that at one time was the largest employer in that area, was a blow to the local economy.

Some former Dan River employees have been hired at Swedwood, Stratton said.

"We've just reinvented ourselves," he said, adding that the area's labor pool draws from a 30-mile radius.

Swedwood makes some of the wood furnishings sold at IKEA stores, as one of the retailer's 1,300 suppliers.

The Danville plant produces bookcases with multiple compartments, side and coffee tables in different sizes and television and storage systems.

LACK side tables produced in Danville are some of IKEA's best-selling items. These tables are created in a variety of colors, from pink to red or black. They're simple and have a long history with the retailer.

"They're a very big staple," said Joseph Roth, an IKEA spokesman. The tables sell for $14.99 each, according to IKEA's catalog.

On a recent morning at the Danville plant, employees wearing plastic protective glasses and earplugs moved pieces of wood down conveyor belts and placed wood slabs into long cardboard boxes. Around the plant maintenance workers rode bikes with tool boxes on the backs.

The plant's machines largely are operated by computer. Some employees traveled to Poland for training at a Swedwood facility there, and Polish workers have come to Danville to offer assistance on the German, Italian and Austrian equipment.

The Danville jobs pay at least $12 an hour, said Jorgen Lindquist, a vice president for Swedwood North America. At 40 hours a week, that works out to nearly $25,000 annually.

The average wage in 2006 for Danville was $28,912, according to the Virginia Economic Development Partnership.

Once the IKEA furnishings are boxed up (they are sold in disassembled parts), they're shipped first to East Coast distribution centers in several states, including Georgia, Maryland and New Jersey. After that, they land in stores.

What keeps IKEA afloat

The subject of IKEA's stores comes up often with Roth.

He's received many inquiries about whether IKEA will open its own retail or outlet store in Danville. The retailer has firm reasons why it will not.

"IKEA products are only available for sale at IKEA stores," Roth said.

One of the closest IKEAs to the Roanoke Valley is in Woodbridge, but a Charlotte, N.C., store is planned for a spring 2009 opening.

Additionally, the Swedwood facility only produces a small amount of furniture, and IKEA is not interested in having stores that carry only a few items, Roth added.

"Why open up a tiny storefront unless it can show the selection?" he asked.

And, as with most any large retailer, an area's population size is a big factor in deciding whether to open a store. IKEA stores land in areas where at least 2 million people live within a 40- to 60-mile radius, Roth said.

Danville, with a population of about 46,988 in the city and about 61,501 in Pittsylvania County, doesn't make the cut.

But IKEA, whose U.S. operation is based in Pennsylvania, still believes growth is necessary, though Roth said the retailer is not growing too fast.

Globally, it opens 10 to 20 stores a year. In the United States, IKEA has 34 stores out of a total 275 worldwide. Its sales rose 14 percent in 2007, according to a company report, but the privately held retailer does not release other figures.

The United States ranked second in total sales for IKEA, grasping 10 percent of the total behind Germany with 16 percent.

It's apparent that IKEA is weathering a sales downturn across the furniture retail industry, because it attracts a niche customer, said one furniture expert.

Joe Carroll, publisher of Furniture/Today, a North Carolina-based magazine for the industry, called IKEA a "lifestyle specialty store."

Its audience is young couples, students and others desiring an ultra-contemporary look for furniture that does not necessarily have to last forever, he said.

Prices for IKEA merchandise is considered reasonable but not cheap, Carroll said. For example, some bookcases retail for $149, while a love seat is $279.

IKEA's stores also are strong draws, often housing a restaurant and a children's play area with child care so parents can shop.

Customers also can take furniture home, disassembled, the day they purchase it.

"They have made themselves a destination point," Carroll said.

Carroll pointed out that not all furniture retailers are suffering. Others that are doing well and appealing to a similar lifestyle niche audience as IKEA are Williams-Sonoma Home and Pottery Barn.

Though the Danville facility will not be associated with retailing, it wouldn't be there without it. IKEA's retail stores must thrive for Swedwood to keep producing the in-demand wood furnishings.

"We wouldn't make this commitment [to Danville] if we weren't convinced of the need," Roth said.