In Chicago I think a place like State St. would be perfect for IKEA. It’s the “second” shopping boulevard (with the main one being Mag Mile) where rent is cheaper and the businesses attract more locals as opposed to tourists. It’s also centrally located in the Loop where it will be more equidistant to the various neighborhoods. They would be well advised to sell a greater selection of office furniture being so close to millions of square feet of office space.
However my thoughts were more along the lines of the very near suburbs, where there's a fair amount of vacant properties.
I don't know how well things are going at the Lincolnwood mall, on Touhy and McCormick Ave, just on the border of the city. Carson's just closed, and the Room Place furniture store has moved in. There are a handful of underperforming malls on the outskirts of the city, and it would putting an IKEA would definitely drive of traffic and make it more attractive.
It seems to me like it would be hard to scale an IKEA down-- the showroom side needs to be large because assembled furniture is large, and the warehouse side also needs to be large to stock everything (unless IKEA changes up their business model to do everything by delivery, but then they've lost their big distinction from all the other furniture stores around).
In central Paris, there is one: https://www.reuters.com/article/us-ikea-france-store/ikea-op... - I'm guessing it is slightly experimental.
Also, the Ikea In Vélizy (southwest suburb of Paris) only has kitchen & bathroom. It is smaller than a standard Ikea but not city-center small.