The real IKEA success

Upon stumbling across this article on The Star, I just simply can't pass off the chance to highlight how successful IKEA is, both as a furniture retailer and as a business. Or rather I can't help but highlight how brilliant Ingvar Kamprad is as a businessman and entrepreneur.


I'm pretty sure most of you are aware who Ingvar Kamprad is. If you don't, please familiarize yourself with Forbes Billionaires. Ingvar Kamprad(all $33 billion of him, as valued by Forbes.com) is the man that brought you the low cost, high quality furnitures, all across the globe. Be awed by its presence, for the nearest competitior is no where IKEA's size.Hail the furniture giant all the way from Sweden. Wait, is it really from Sweden?

Let's look at the facts, with some help from Wikipedia.

The corporate stucture of IKEA is much like a huge spiderweb. Let's take a look at this.

The parent for all IKEA companies—the operator of 207 of the 235 worldwide IKEA stores—is Ingka Holding, a private Dutch-registered company. Ingka Holding, in turn, belongs entirely to Stichting Ingka Foundation. This is a Dutch-registered, tax-exempt, non-profit-making legal entity, which was given the shares of Mr Kamprad in 1982. Stichtingen, or foundations, are the most common form of not-for-profit organisation in the Netherlands; tens of thousands of them are registered.......... [Source: The Economist]

I really don't have to go into details about how big Stichting Ingka Foundation is, or how much are they valued. But take note of this.

If Stichting Ingka Foundation has net worth of at least $36 billion it would be the world's wealthiest charity. Its value easily exceeds the $26.9 billion shown in the latest published accounts of the Bill & Melinda Gates Foundation, which is commonly awarded that accolade. [Source: The Economist]

That's not all the story though.......

IKEA's complex corporate structure appears primarily designed to allow its founder, Ingvar Kamprad, to avoid taxation while still maintaining tight control over IKEA's operations. [Source: Wikipedia]

Now I know that wikipedia articles can't be quoted as references. But it really summarizes the article in a clear way. An interested reader could go forward to the related article in The Economist for the full article.

More?

But IKEA has reported that in 2004-2005, the Ingka Foundation's donations were concentrated on the Lund Institute of Technology in Sweden, and the Lund Institute reported the receipt of $1.7 million grants from the foundation during both of those years. By way of comparison, the Gates Foundation made gifts of more than $1.5 billion in 2005. [Source: Wikipedia]

Well, that sums it all. The REAL IKEA success, tax avoiding at the VERY BEST, got to give them credit for that. And please, just give a bit more to charity will ya?

I for one, don't really like IKEA's products, it makes the world too homogeneous. Don't you think so?

Thanks again to The Star for reminding me of what my girlfriend told me a while ago. Yes, she found out about this first.

References:

1. Ikea, Wikipedia.
2. Ikea, Flat-pack accounting, The Economist.
3. Ingvar Kamprad, Wikipedia.
4. The World's Billionaires, Forbes.com
5. Chance to learn about Ikea's success, March 15 2007, The Star.