Who is Ingvar Kamprad?
Ingvar Kamprad was the founder of Swedish furniture store giant IKEA, and one of the world's richest people according to Forbes. Kamprad founded IKEA at the age of 17 with the vision of creating a better everyday life for people. His vision turned into a multi-billion dollar business with 433 IKEA stores in 53 markets as of 2019. Kamprad kept IKEA as a tightly controlled private company under the Ikano Group, so financial details are limited. However, the company did report sales of 41.3 billion euros in 2019.
Kamprad died on January 27th, 2018 at the age of 91 in his home country after an illness, according to the company. During his lifetime, IKEA became one of the world's most recognized brands and is still widely known for stylish, functional and affordable self-assembled furniture.
Ingvar Kamprad and the IKEA Story
Kamprad founded IKEA in 1943 with a small gift from his father, running it as a mail order sales company selling a variety of products including small items like wallets, picture frames and ballpoint pens. IKEA was named using Kamprad's initials in addition to the first letters of Elmtaryd (the farm he was raised on) and Agunnaryd (his home village). IKEA did not pivot exclusively towards furniture until 1948, after seeing it become an increasingly profitable revenue stream. Kamprad sourced furniture from local designers, and helped develop the flat-pack system for transporting ready-to-assemble products that could be picked up easily in store or transported by truck.
- Ingvar Kamprad was the founder of IKEA and created the core business model that has helped the furniture company become a dominant global brand.
- Kamprad's success resulted in him becoming one of the world's richest people.
- Kamprad structured IKEA's operations as holding companies all answering to a controlling trust.
With the fundamental business proposition of well-designed furniture at a low price settled, Kamprad soon found himself in a pinch as local suppliers began to boycott the business. This forced Kamprad to bring more of the furniture production and design in-house and led to him refining his business model to bring in more customers. IKEA did not open a showroom until 1953, but this model of having showrooms for customer's to view products and then pick them up after became the hallmark of an IKEA shopping experience. Kamprad opened his first IKEA store opened in Sweden in 1958, and the United States saw its first IKEA in 1985. IKEA has since expanded all over the world and continues to be the major force in home furniture.
IKEA's Corporate Structure
Kamprad was a famously frugal man with a keen mind for business. One of his most prescient moves was structuring IKEA within a controlling trust that uses holding companies to own and operate various business functions. IKEA does allow some franchising, but a large amount of its business is managed directly through the trust, including its manufacturing and distribution arms. IKEA publicly reports basic figures on a voluntary basis, including the number of stores and overall revenue. Investors have longed dreamed of seeing IKEA go public. However, even with the passing of its founder, Kamprad's sons are guiding the business and have made no indication that they will ever seek an IPO.
There are many positive stories about Kamprad's frugal lifestyle, egalitarian view of all IKEA employees, and lifelong philanthropy. However, Kamprad's involvement with a pro-fascist movement in Sweden during his teenage years - and particularly his friendship with Per Engdahl, a known fascist at the time - has lingered as a mark against his overall positive legacy. Kamprad's involvement with the group is believed to have started in 1942 and ended in 1945. Kamprad addressed this controversy while he still lived, calling it the "greatest mistake of my life" in a 1994 letter to IKEA employees.