How IKEA Founder Kamprad Structured the Brand For Growth

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IKEA founder Ingvar Kamprad

IKEA founder Ingvar Kamprad was a true innovator. He changed the way the world shops for (and thinks of) the home and its contents, and empowered consumers with the tools for self-assembly and smart home design—all without breaking the bank (including his own).

With a heavy heart, the company confirmed that he passed away at 91 on Saturday, surrounded by his loved ones in Sweden and leaving an empire of cheap, simple, stylish furniture, 86 years after reselling boxes of matches he bought from an aunt for a healthy profit and tasting the fruits of commerce for the first time. “I still remember the lovely feeling,” he once said.

“We are mourning the loss of our founder and dear friend Ingvar. His legacy will be admired for many years to come and his vision – to create a better everyday life for the many people – will continue to guide and inspire us,” said Jesper Brodin, CEO and President of the IKEA Group.

“Ingvar’s extensive knowledge and engagement over the years have been a huge source of inspiration. His heritage is always with us and we will continue to constantly search for new and better ways – to find solutions that no one else has thought of and to do great things for the many people, together,” said Lars Thorsén, CEO of Ikano Group.

Born in 1926 in Småland, southern Sweden, Kamprad founded IKEA in 1943, at the age of 17. Frugal in his private life, including buying vintage clothing, flying coach and driving a 20-year-old Volvo, he structured the business as privately-held company. Its unconventional ownership structure involved it being owned by a foundation that Kamprad set up, so it’s technically a non-profit to this day and unlikely to ever go public.

He chose the name IKEA as a combination of his own initials plus the first letters of the family farm (Elmtaryd) and district (Agunnaryd).

His focus on well-designed, functional and affordable furniture and home items, plus a thoughtful yet ambitious management style and business model, led IKEA to become one of the world’s most valuable brands. It’s still the leading outfitter of college residences, starter apartments, bachelor pads and homes on the planet, making the brand the world’s biggest furniture retailer.

Kamprad only retired five years ago from the board that controls the IKEA brand and began ceding power to Mathias, one of his three sons. He died on Saturday one of the richest people in the world, ranked No. 8 on the Bloomberg Billionaires Index with an estimated worth of $58.7 billion. His company had global revenue of $45 billion last year and has consistently been praised as offering generous perks and being a fair and generous employer.

The IKEA brand today stands at 355 stores in 29 countries, and  includes kitchen appliances, food, home accessories, bikes—even a bank, with Ikano in Europe. It’s fair to say that his approach to the retail experience, from its first warehouse in 1987, redefined shopping.

As The Guardian notes,

“IKEA’s winning formula was to lead you through curated rooms – thereby suggesting other things you might not have realised you wanted (and probably didn’t) – before allowing you into a “behind the scenes” warehouse of cardboard boxes piled high. This cleverly fused domestic stagecraft with the feel of a discount, no-frills cash-and-carry, leaving shoppers in no doubt that they were getting a bargain. Overnight, furniture was transformed from being a thing of weighty heirlooms to be passed on to grandchildren, to something more fleeting and disposable. The decision to buy a new sofa was no longer momentous, but something that you might change in a few years, or update with a different coloured cover.”

It also treated furniture as both functional and fashionable, mixing staples such as the iconic Billy bookcase—more than 60 million sold worldwide—to designer-branded pieces that would change with the seasons. Known in the 1990s for its blonde wood and neutral tones, design-led thinking that started in the 2000s brought colorful and innovative items via its PS Collection, such as a folding sofa that hung on a wall and a self-watering flower pot that keeps untended plants alive for two weeks.

Kamprad’s biggest regret: A flirtation with fascism in his youth, including attending meetings of a Nazi group in Sweden in the years after World War II, haunted him for the rest of his life. In 1994 he apologized to IKEA employees worldwide, saying he “bitterly” regretted those actions. A chapter in his 1999 autobiography asks, “When is an old man forgiven for the sins of his youth?”

The 10 most popular IKEA purchases:

Lack coffee table
• Malm bed
• Swedish meatballs
• Klippan sofa
• Ribba frame
• Färgrik mug
• Poäng chair
• Frosta stool
• Billy bookcase
• Frakta blue and yellow shopping bag

 

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