Here’s the story of one of the richest self-made billionaire, IKEA founder Ingvar Kamprad
Ingvar Kamprad is a Swedish business magnate and founder of IKEA, a Swedish retail company specialising in furniture for more than 70 years, and is one of the richest people in the world.
He is now one of the world’s richest self-made billionaires with a net worth of $48.1 billion.
Inherently simplistic and extremely wealthy, Kamprad remains confident and courageous and an innovative thinker.
Developing business by selling matches to neighbors from his bicycle as a young boy, here’s how Kamprad started a privately held $11.8 billion furniture revolution and became a billionaire.
Kamprad was born on March 30, 1926 in Pjätteryd, Sweden. He was raised on a farm called Elmtaryd near the small village of Agunnaryd in Ljungby Municipality in the province of Småland. His paternal grandfather was from Germany, but moved the family to Sweden.
By the age of five, he began selling matches for profit. He found that he could buy matches in bulk very cheaply from Stockholm, sell them individually at a low price, and still make a good profit. From selling matches, at the age of 10, he expanded to selling fish, Christmas tree decorations, seeds, and later ballpoint pens and pencils around the neighborhood.
In his teens, Kamprad was influenced by his German grandmother who was “a great admirer of Hitler.” As a result, he became involved in a Nazi youth movement, which he later described that time as “the greatest mistake of my life”. He even wrote a letter to his employees asking them to forgive him.
When Kamprad was 17, his father gave him a cash reward for excelling in his studies, despite his dyslexia. The money given by his father was used by him to start IKEA in 1943. However, Kamprad did not introduce furniture until five years in; he had started by selling small household items, like picture frames.
The name IKEA is an acronym that is made up of the initials of his name (Ingvar Kamprad) plus those of Elmtaryd, the family farm where he was born, and the nearby village Agunnaryd.
In 1956, Kamprad radically changed the furniture market by introducing “flatpacking,” the method now closely associated with IKEA where the costs are reduced as it allows the consumers to purchase their furniture in pieces and fit it themselves.
The best-selling author, Malcolm Gladwell describes Kamprad as a rare breed, who possesses a combination of openness, conscientiousness, and disagreeableness. These are the personality traits that made him a brave innovator in the start of his career.
To avoid unfavorable business taxes for his growing company, Kamprad moved IKEA headquarters from Sweden to Copenhagen, Denmark in 1973, against popular opinion of the Swedes. He also moved himself and his family to Switzerland to protest against Sweden’s increasing taxes. However, the corporation is now based in the Netherlands, and Kamprad himself has since returned to Sweden.
Kamprad runs a complex corporate structure that includes a charitable arm and a retail and franchise arm. The Stichting INGKA Foundation owns the IKEA Group of companies, based in the Netherlands and it also the charitable arm of the corporation. Funds from Stichting INGKA Foundation can only be used one of two ways: either it has to reinvested in the IKEA Group and its franchises, or it has to be donated for charitable purposes.
Kamprad married his first wife Kerstin Wadling and they adopted a daughter, Annika. In the 1960s, he married his second wife, Margaretha Kamprad-Stennert with whom he had three biological sons, Peter, Jonas, and Mathias. All of them have incredible influence at IKEA, as they work on the corporation’s overall vision and long-term strategy. In June 2013, Kamprad resigned and his youngest son Mathias took over as the chairman of Inter IKEA holding SA, the company that controls Inter IKEA group and operates franchises around the world.
There has been speculation about the true value of Kamprad and his family’s wealth for the past few years. Since Stichting INGKA Foundation’s funds can only be used in two ways, Kamprad’s lawyers decided that they do not count toward his personal net worth. However, his net worth was valued at $48.1 billion, according to Wealth-X.
On taking his company public: “I decided that the stock market was not an option for IKEA,” Kamprad has said. “I knew that only a long-term perspective could secure our growth plans and I didn’t want IKEA to become dependent on financial institutions.”
Two books have been published about the IKEA story. Kamprad first detailed the IKEA concept of frugality and enthusiasm in a manifesto entitled “A Testament of a Furniture Dealer”. Written in 1976, it has since been considered the fundamental ideology of the IKEA furniture retail concept. In the late 1990s, he worked with a Swedish journalist Bertil Torekull on the book “Leading by Design: The IKEA Story”. In the autobiographical account, he further describes his philosophies and the trials and triumphs of the founding of IKEA.
Kamprad is known by his peers to be incredibly simple and plain. He always travels economy class in planes, and if he goes by train, if possible, he will sit in second class. He never stays at expensive hotels, and has driven the same Volvo for two decades.
Spanning 47 countries, IKEA today has 370 stores. According to Wealth-X, Kamprad never borrowed money or issued a stock until he passed IKEA over to his foundation.
IKEA Food Services accounted for about $1.8 billion in sales last year. Every IKEA store has a small restaurant that serves foods each location’s local snacks and dishes as well as native to Kamprad’s Swedish roots. Swedish favorites like meatballs and waffle desserts are available for purchase in-store and online.
After spending 40 years in Switzerland and converting IKEA into the global company that it is today, Kamprad after the passing of his second wife in 2011, shifted back to his hometown in Sweden to be closer to family and friends in 2013.
Despite his son Mathias’ role as a Chairman, Kamprad still serves as a senior advisor and is a chief decision maker at IKEA. In March this year, he turned 89 and issued press reports that he’s leaving his sons to run IKEA and its associated companies. “Oh, I have so much work to do and no time to die,” he said.
