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 is 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, flat packaging and self-assembly become part of the concept.
The first IKEA store opens in Älmhult, Sweden. Many are sceptical of the idea of opening a large furniture store in a small village in the deep forests of Småland. But as it turns out, people are prepared to travel long distances to visit the store and buy attractive furniture at low prices.
A visit to the IKEA store becomes a day out for the family, creating a need and opportunity for unique services like a self-service 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 attracts customers with products of good design, function and low price. He attracts 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 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, 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 email 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 range themselves, a self-service storage area is introduced. The capacity for serving customers increases significantly.
The first IKEA store outside Scandinavia is established in Spreitenbach, Switzerland, followed in the coming years by stores in Germany.
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 and his family, as well as certain IKEA office functions, move from Älmhult in Sweden to Humlebæk in Denmark.
Ingvar Kamprad’s booklet “The Testament of a Furniture Dealer” 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 communication of the IKEA spirit and values. Leadership by good example remains the backbone to shape the IKEA culture, but the documentation of the nine theses becomes a much appreciated support. It has since continued to inspire people in the different companies operating under the IKEA trademarks 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 will always be able to act in the best interests of the business and the many people. The stock market is not an option, and he wants to avoid putting all eggs in one basket. He seeks for an ownership structure that can create the 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 IKEAfounder also realises that in order to secure international expansion and to ensure an aligned brand experience for customers, he needs to further develop and protect his unique and fast-growing business.
An important challenge is to strike the balance in terms of keeping the concept consistent without limiting or hindering the innovative spirit. Providing the best possible conditions for business acumen and entrepreneurship is critical.
The answer is to separate the ownership of the retail operation from the ownership of the concept and the IKEA brand – to keep these separate roles in independent business groups, operating under a franchise system. Ingvar Kamprad thus donated a large number of the operating companies to a Dutch Foundation, the INGKA Foundation, which today owns many 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. And this, in turn, fulfils the IKEA business idea..
Inter IKEA Systems B.V. is established in the Netherlands and starts to conceptualise the IKEA business model into what is now the IKEA Concept.
Ingvar Kamprad retires from his executive management roles. The IKEA operation is been divided into three separate and legally independent groups of companies: Inter IKEA Group, INGKA Group and IKANO Group. Different executive management teams are appointed for each company group.
The Interogo Foundation is established in Liechtenstein and becomes the ultimate owner of the Inter IKEA Group. The aim of this enterprise foundation is to own, govern and invest in Inter IKEA Group, and to secure independence and longevity of the Group and the IKEA Concept.
Inter IKEA and Interogo were established during the 1980s to secure independence and longevity of the IKEA Concept. The IKEA Concept is the core asset of Inter IKEA Group and its franchisor operation. The overall purpose of Inter IKEA Group is to secure continuous improvement, development, expansion and a long life of the IKEA Concept. This will require investments in both good and bad times. The Franchise Division within Inter IKEA Systems B.V. is the core of the business.
Statutes including a purpose clause defining the long-term purpose of the foundation, and guidelines on how the foundation shall act as owner of Inter IKEA Group, were enacted. The aim was to secure independence and longevity of Inter IKEA Group and the IKEA Concept, and thereby 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 of Inter IKEA Group, 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. The IKEA Concept Center is established.
The IKEA Concept Center is a facility where all IKEA retailers and other IKEA trademark users 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 a focus on investments in non-listed Swedish companies.
IKEA Tillsammans, the corporate culture centre operated by Inter IKEA Systems Service AB, opens in Älmhult, Sweden.
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.
Inter IKEA Systems B.V., the worldwide IKEA franchisor, acquires the IKEA trademarks from Interogo Foundation on 1 January. The purpose is to consolidate and simplify the ownership of the IKEA trademarks.
Inter IKEA Culture Center AB is founded in Sweden to operate IKEA Tillsammans and the IKEA Museum in Älmhult, Sweden.
Mathias Kamprad is appointed chairman of the board of Inter IKEA Group.
Ingvar Kamprad resigns from the board of Inter IKEA Group. He also resigns from the Supervisory Council of Interogo Foundation.
The nine business units of the Inter IKEA Property Division are re-branded and consolidated under one brand – Vastint.
Inter IKEA Group sells its 51% participation in Inter IKEA Centre Group A/S (former Retail Centre Division) to INGKA Group.
Starting May, separate holding companies and management teams are put in place to look after the IKEA related business and the investment business separately. (Both previously fell under Inter IKEA Group.)
Inter IKEA Holding B.V. in the Netherlands is the holding company for the new Inter IKEA Group. The holding company of the investment businesses will be established in Switzerland during May 2016. Both companies have Interogo Foundation as its ultimate owner.
In June, the IKEA Museum opened in Älmhult. It is housed in what was once the very first IKEA store in Älmhult, which opened in 1958. The museum is
7,000 m² and includes an exhibition area of approximately 3,500 m², as well as a restaurant, gift shop and educational facilities.
To improve the IKEA franchise system and clarify roles, IKEA range, supply and production activities were transferred to the new Inter IKEA Group headed by Inter IKEA Holding B.V. The ownership changes came into effect on 31 August 2016. Inter IKEA Group consists of three core businesses – franchising, range and supply and industry.