The life of Ikea’s penny-pinching billionaire

Livin’ la vida Ikea: The company uses 1% of the world’s entire wood supply for its products.

Has Ikea made our lives better? Ingvar Kamprad certainly thought so. Ikea’s famously frugal founder, flat-pack furniture pioneer and former fascist has died. But his company is here to stay.

He was the eighth-richest person on the planet. Yet Ingvar Kamprad insisted on flying economy class and taking salt sachets home from restaurants.

Kamprad, who has died aged 91, made his fortune from Ikea, the furniture giant he founded in 1943. With their unpretentious designs and unpronounceable names, the company’s bargain products have infiltrated homes around the world: one “Billy” bookcase is sold every ten seconds.

Ikea’s love of low costs was embodied by Kamprad, who was famously frugal. He liked to remind people that he wore second-hand clothes and recycled teabags. He put this down to “lista”, a quality typical of the poor Swedish region of Småland, where he grew up. “Lista” means making do with the little that you have.

Kamprad expanded on this ethos in The Testament of a Furniture Dealer, a document he wrote in 1976, as Ikea was going global. He noted that, for too long, only the rich had been able to afford quality furniture. With imagination, humility and an avoidance of waste, Ikea could change that. The company’s aim, he wrote, was “to create a better everyday life for the many”.

And the many seem to agree. Ikea now has branches in 49 countries and brings in record revenues every year. Huge crowds turn up for store openings; couples even get married instore. The brand promotes an inclusive image: Ikea was the first major company to feature a gay couple in a TV advert (back in 1994).

Yet its democratic message has been tarnished by scandals. In 1994, Kamprad was revealed to have once associated with Nazis (he apologised for his youthful “stupidity”). Separately, it emerged that some Ikea products were made by political prisoners in East Germany.

There is also a dark side to Ikea’s frugality. To minimise tax, the corporation is structured in an extremely complex way. In fact, it is technically a charity, although it gives relatively little to charitable causes. In the Swiss town where Kamprad lived (for tax reasons), he was known as “the miser”.

So, is Ikea a force for good?

Sofa, so good

Don’t make me laugh, say some. The company stands for money, not democracy. That is why it dodges tax and hired cheap prison labour. Its ads featured gay men, but it also airbrushed women out of its Saudi catalogue. Plus it has made all our homes look alike — there is something anti-democratic about that, too.

Look at the bigger picture, reply others. Ikea has apologised for all its scandals. Beyond that, what matters is not how much profit it makes, but whether it benefits consumers. We take it for granted that everyone can now own quality, stylish furniture. But before Ikea, that was not possible. We should be grateful.

You Decide

  1. Would you rather shop at Ikea or save up for more luxurious furniture?
  2. Should everyone practice frugality?

Activities

  1. Imagine you had the chance to interview Kamprad. Write down five questions you would have asked him.
  2. Ikea has asked you to design a new product that fits its values. Come up with something original, useful and - most importantly - affordable!

Some People Say...

“Only while sleeping one makes no mistakes.”

Ingvar Kamprad

What do you think?

Q & A

What do we know?
Kamprad’s business career started when he was five: he bulk-bought matches from his aunt and sold them individually at a profit. He founded Ikea as a mail-order service in 1943, selling miscellaneous objects, and added furniture in 1948. He directed the company for a long time and remained closely involved with its operations into his final years.
What do we not know?
Exactly how rich Kamprad was. Bloomberg Billionaires Index estimated his wealth at $59bn (£42bn). According to his tax returns, he only had $113m. Due to the secretive nature of both his and Ikea’s finances, it is hard to know for sure. Meanwhile, the EU has launched an investigation into the corporation’s tax avoidance schemes in Europe.

Word Watch

Eighth-richest person
See Q&A.
Ikea
The name comes from Kamprad’s initials, plus Elmtaryd (the farm where he grew up) and Agunnaryd (his home village).
Unpronounceable names
Try saying these: Cirkustält, Isfjorden, Kråkskar. Told you!
Famously frugal
In fact, Kamprad was a bigger spender than made out. He drove a Porsche and owned many properties, including a villa by Lake Geneva.
Ethos
The spirit (ethics) and values of a person, group, community or tradition.
The Testament of a Furniture Dealer
The document speaks passionately about the strong values of the “Ikea family”. “Those who cannot or will not join us are to be pitied,” it declares.
Avoidance of waste
A good example is flat-pack furniture, which Ikea pioneered. The technology allows delivery vans to save on space, and therefore costs.
Charity
Ikea is owned by Stichting Ingka Foundation, a Dutch-based, tax-exempt non-profit organisation. It claims to improve living standards by manufacturing affordable furniture.
Swiss town
Kamprad lived in Switzerland for almost four decades. He moved back to Sweden in 2014, after tax rates in the country were lowered.

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