Remembering Ingvar Kamprad, The Everyman Founder Of IKEAMarch 28, 2018
Ingvar Kamprad, the self-assembled business magnate who lent his initials and founding philosophy to the Swedish retail giant IKEA, may have been the world’s most frugal billionaire.
While the size of his fortune was the subject of ongoing dispute – Bloomberg Billionaires Index ranked him as the world’s eighth wealthiest person in 2015 with assets of $58 billion while Forbes put his wealth that year at $3.5 billion – the Swedish-born businessman professed to live a modest existence before passing away in late January 2018 at age 91.
Kamprad preached an ascetic way of life, an attitude that defined the IKEA low-cost culture.
According to his New York Times obituary, he flew only coach, insisting that company execs do the same. On the ground, all employees were to shun luxury hotels and use both sides of a sheet of paper – just as the furniture assembly instructions still do. He drove a shabby ’93 Volvo and was known to buy his holiday wrapping paper after Christmas when it was on sale. He recycled tea bags, pocketed salt and pepper packets from eateries and regularly dined at the store bearing his name given its modest prices. To avoid Sweden’s high taxes, he left his homeland to take up residence in Switzerland in 1976 before returning decades later.
It was no doubt that intuitive sense of economy that helped build the IKEA empire, today the world’s largest furniture retailer. His 1976 treatise, “Testament of a Furniture Dealer,” outlined the nine tenets of the IKEA way, including “the art of managing on small means, of making the best of what we had; cost-consciousness to the point of being stingy; humbleness, undying enthusiasm and the wonderful sense of community through thick and thin.”
He embraced the notion of “low price with a meaning,” recognizing that customers had a limit to their resources and fixated on the belief that each of the store’s product areas should include “breath-taking offers.” It was an edict that touched every part of the retailing empire, from product developers, designers, buyers, office and warehouse workers to the sales people on the storeroom floor.
And customers noticed.
From its modest beginnings in 1943 – when Kamprad was just 17 and already a somewhat seasoned entrepreneur – IKEA today has more than 413 locations in more than 50 countries on six continents. In 2017 revenues approached $45 billion built on an estimated 817 million customer visits.
And its success is built as much on quality as quantity. Earlier this year, the company won the Best Corporate Brand in Europe Award from Best Brands, which recognizes “brands that are commercially successful and trigger certain emotions: brands that shine, that stick in the mind of consumers and are associated with innovation and positive experiences.”
Born in 1926, Kamprad grew up on his family farm (Elmtaryd) in Agunnaryd – whose initials constitute the latter half of the IKEA acronym. He caught his entrepreneurial bug early, and as a small boy was selling pencils and matchboxes, buying them in bulk so that we could still flip them profitably on the cheap. He then branched out to other commodities – fish, holiday decorations and pens – later taking out ads in local papers and eventually improvising his own version of a mail-order catalog.
By 1950 he was focusing solely on the most popular items, the furniture that he had sourced from local manufacturers. Soon after, when he noticed that an employee was taking the legs off a table in order to help a customer move it, he hit on the idea of creating a line of furniture that could be packed efficiently in boxes, which not only eliminated assembly costs but also, he believed, gave customers an added pride in something they put together themselves. In 1958, the showroom that he had opened five years earlier became the first IKEA store in Älmhult in southern Sweden.
Kamprad stayed active in IKEA, a privately held company that was largely held in trust, until 1986 when he assumed a more advisory capacity. Still, he was known to stroll anonymously through the chain’s stores in Europe and regularly gave into the temptation to help unsuspecting customers. He stepped down from the board in 2013, naming his youngest of three sons as company chairman.
The IKEA founder died of complications from pneumonia on Jan. 27, 2018.
In a statement, Jesper Brodin, CEO and president of the IKEA Group, 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.”