IKEA founder Ingvar Kamprad was born and grew up on the farm Elmtaryd, parish of Agunnaryd in Småland, in the south of Sweden. As a young boy Ingvar Kamprad knew that he wanted to develop a business. Various events during his upbringing gave him a strong drive to create his own resources and to be independent.
The first commercial business was started in the name IKEA, initially a mail-order business selling pencils, postcards, and other merchandise. The name derives from the initial letters of Ingvar Kamprad and of Elmtaryd and Agunnaryd.
Furniture manufacturing was an additional business for many farmers in Småland. Furniture is introduced in the IKEA business as a complement to the general merchandise. This was a success and Ingvar Kamprad starts exploring innovative solutions such as furniture design, self-assembly and advertising.
The first annual IKEA furniture catalogue is published in Sweden.
A showroom opens in Älmhult. Here the customers can see and experience the quality of the products before ordering them and Ingvar can meet customers in person and learn from them.
The IKEA business starts designing its own furniture. Over time the flat pack and self-assembly become part of the concept.
The first IKEA store opens in Älmhult, Sweden. Many were sceptical to the idea of opening a large furniture store in a small village in the deep forests of Småland, but people were prepared to travel long distances to visit the store and buy attractive furniture at low prices.
A visit to the IKEA store became a day out for the family creating a need and opportunity for unique services like a self-serve restaurant and a supervised children’s playroom.
Late 1950s early 1960s
Traditional furniture stores usually bought and displayed what the furniture makers produced, and the customers had to buy what the furniture stores had in stock or could order. Ingvar Kamprad tried to influence both the customers and the factories. He attracted customers with products of good design, function and low price. He attracted factories with large orders. Larger orders meant lower purchasing prices; thus enabling lower sales prices, more customers and higher sales volumes. This was a revolution. Without anybody noticing it, the largest change to date in furniture distribution had taken place.
Ingvar believed that television would become an important part of people’s life at home. He invested in a TV manufacture in Helsingborg. He was right about the future of TV but had underestimated the differences of being a furniture dealer and manufacturing TVs. The television adventure was such a great loss that the entire business survival was threatened.
Competitors, who did not appreciate the intensive price pressure from the IKEA store, forced suppliers to stop their deliveries. Ingvar Kamprad turned to Denmark to find new suppliers and in 1961 also to Poland. Since then the Polish furniture industry has been an important partner to the IKEA operation.
The international expansion of the IKEA business begins with establishments of small start-up stores in Norway in 1963 and in Denmark in 1969.
The flagship store at Kungens Kurva south of Stockholm is opened 1965. The establishment was a huge investment..
Maintaining a strong IKEA culture is recognised as one of the most crucial factors behind the continued success of the IKEA business.
The rapid growth also calls for new administrative solutions. The first computer, with the size of a room was bought. During the 1970s computerisation enables the introduction of computer-controlled delivery of products to stores. During the early 1980s the first e-mail system would be introduced.
The flagship store at Kungens Kurva south of Stockholm which opened 1965 was ravaged by a fire in 1970 and reopened in 1971. Based on the good experiences from customers picking up a small part of the furniture ranges themselves a self-service storage area is implemented. The capacity for serving customers increases significantly.
The first IKEA store outside Scandinavia is established in Spreitenbach, Switzerland, followed by stores in Germany the following years.
A range of Swedish family businesses leave Sweden due to the country’s fiscal policy and the risk of being forced to sell their companies in the event of an inheritance. Ingvar Kamprad with family, as well as certain IKEA office functions moves from Älmhult in Sweden to Humlebæk in Denmark.
Inter IKEA Finance SA, is founded in Luxembourg.
The booklet “The Testament of a Furniture Dealer” by Ingvar Kamprad is published. The opening lines are “We have decided once and for all to side with the many people. What is good for our customer is also, in the long run, good for us. This is an objective that carries obligations.”
The testament consists of nine theses, among them “Profit gives us resources”, “Simplicity is a virtue” and “Doing it a different way”. The ending thesis is “Most things still remain to be done. A glorious future.”
The growth and international expansion has called for a complement to face to face communications of the IKEA spirit and values. Leadership by good example was as always the backbone to shape the IKEA culture, but the documentation of the nine theses becomes a much appreciated support, and has ever since inspired people in the different companies operating under the IKEA trademark and sharing the IKEA values.
Late 1970s and early 1980s
Ingvar Kamprad spends a lot of time thinking about how to secure longevity and independence for his business and concept.
Ingvar wants to create a system and structure that always would be able to act in the best interests of the business and the many people. The stock market was no option, and he wants to avoid putting all eggs in one basket. He seeks for an ownership structure that could create best possible conditions for total independence and a long-term business perspective, an ownership structure that would be sustainable over many generations. He describes it as trying to give IKEA eternal life.
In the early 1980s, the IKEA founder also realises that in order to secure the international expansion and to ensure a fairly aligned brand experience to the customers he needs to further develop and protect the unique and fast growing business.
An important challenge was to strike the balance in terms of keeping the concept fairly aligned without limiting or hinder the innovative spirit. Providing the best possible conditions for business acumen and entrepreneurship was critical.
The answer was to separate the ownership of the retail operation from the ownership of the concept and the IKEA brand; to keep these separate roles apart in independent business groups, operating under a franchise system. Ingvar Kamprad therefore donated a large number of the operating companies to a Dutch Foundation – the INGKA Foundation - which today owns a large number of the IKEA franchisees. The franchise business model with both franchisees owned by the INGKA foundation and franchisees owned by other companies enables a worldwide expansion thereby fulfilling the business idea.
Inter IKEA Systems B.V. is established in the Netherlands and starts to conceptualise the IKEA business model into what today has become the IKEA Concept.
Ingvar Kamprad retires from his executive management roles. The IKEA operation had been divided into three separate and legally independent groups of companies - Inter IKEA Group, INGKA Group and IKANO Group - and now different executive management teams are appointed for each company group.
The Interogo Foundation is established in Lichtenstein and becomes the ultimate owner of the Inter IKEA Group. The aim of this enterprise foundation is to own, support and invest in Inter IKEA Group and to secure independency and longevity of the IKEA Concept in line with the intention of Ingvar Kamprad.
Ownership of the IKEA trademarks and the IKEA Concept were earlier separated from the ownership of the retail operation. These intellectual properties are the main asset of Inter IKEA Group. The overall purpose of Inter IKEA Group is to secure independence and longevity, and through Inter IKEA Systems B.V. control, safeguard and develop the IKEA Concept.
The foundation governance structure ensures that the founder Ingvar Kamprad, and in coming generations, the founder family has guiding influence over the long term development of the IKEA Concept.
Ingvar Kamprad instituted statues, regulations and a purpose clause defining the long term purpose of the foundation. It also includes guidelines on how the foundation shall act as owner of Inter IKEA Group with the aim to secure longevity of the IKEA Concept, and by that seek to contribute to a better everyday life for the many people.
Vastint Holding BV, the holding company of the companies in the Property Division, is founded in the Netherlands.
Inter IKEA Holding SA is founded in Luxembourg and becomes the parent company of the Inter IKEA Group of companies.
Inter IKEA Systems B.V. establishes its own IKEA store in Delft, the Netherlands. This IKEA store is a pilot store which in addition to be an ordinary IKEA store also carries facilities for testing and training in the IKEA Concept.
Inter IKEA Group establishes group service companies in Waterloo, Belgium.
The booklet “A Little IKEA Dictionary” by Ingvar Kamprad is published. Some words had become an essential part of the IKEA heritage and the purpose was to avoid misunderstandings and to shape the IKEA spirit further. Examples of words in the dictionary are humbleness, willpower, simplicity, cost-consciousness and common sense.
Inter IKEA Systems Service AB, providing services to Inter IKEA Systems B.V., is established in Helsingborg, Sweden.
The training activities in the IKEA store in Delft are developed into the IKEA Business College.
Inter IKEA Centre Group A/S is established in Denmark as a joint venture between Inter IKEA Group and INGKA Group.
The IKEA Delft store as well as all other Inter IKEA Systems B.V. areas are extended and remodelled, and IKEA Concept Center is established.
IKEA Concept Center is a facility where all IKEA retailers can learn about the IKEA Concept and its recent updates. It is a place where shopping, learning, testing and supporting come together.
Inter IKEA Centre Group opens MAR Shopping outside Porto in Portugal. The family friendly shopping centre concept, with an integrated IKEA store, becomes a point of reference for future development.
Inter IKEA Centre Group secures land use rights in China and announces investment and expansion plans in the country.
Inter IKEA Investments AB opens an office in Stockholm with focus on investments in non-listed Swedish companies.
IKEA Tillsammans, the corporate culture centre operated by Inter IKEA Systems Service AB opens in Älmhult.
The Property Division acquires a large land area in East London, close to the centre of Stratford for future development of residential and commercial properties.
Inter IKEA Centre Group’s first shopping centre in China goes from blueprint to construction with a groundbreaking ceremony in Xishan, Wuxi. The shopping centre is scheduled to open in the end of 2013 or beginning of 2014.
The Property Division launches the Business Garden concept and starts the construction of the first project under the new concept in Warsaw. Three additional Business Gardens are under development.