How IKEA CEO Ingvar Kamprad Created One of the World's Biggest Brandshttp://www.fool.com/investing/general/2013/10/11/ikea-ceo-created-one-of-the-worlds-biggest-brands.aspx Andrew Marder
October 11, 2013
During the 1920s, Ingvar Kamprad sold matches. As a 5-year-old, he found that he could make a small profit by buying matches in bulk, then parsing them out individually. That same entrepreneurial spirit continued to push him, and in 1958 he opened his first retail location. In one swift move, IKEA transformed from a catalog and showroom concept to the familiar storefront that we know today.
Earlier this year, Kamprad stepped down from the board with a net worth of more than $50 billion, according to Bloomberg. Not bad for a kid who started out his global expansion by selling flower seeds in addition to those matches.
The company's success has come largely from its strong branding. In its 2013 brand ranking, Interbrand valued IKEA's brand alone at $13.8 billion, making it the 26th most valuable brand in the world. A different 2011 study, focused on sentiment instead of value, found that only Williams-Sonoma had better consumer sentiment among big home store chains.
With such a valuable brand, IKEA has understandably decided to protect itself. It's done that by separating the brand from the rest of the weird web that comprises the IKEA corporate structure. The details of this setup were examined in wonderful detail by the Economist back in 2006. The long story made short is this -- IKEA makes a lot of money and no one knows where it all goes.
IKEA's corporate structure
Apart from the investments, the strategy, and the retailing group, IKEA also has a division that holds just its brand. That company is, well, here's what the Economist said:
The magazine found that the system in place allowed Kamprad -- or his new replacement -- to maintain complete control over the business in almost every situation. The business has written its bylaws so conservatively that a takeover is almost impossible. This complexity has the side effect of effectively making the business permanently private. An IKEA IPO is unthinkable in its current form.
What that means is actually not as clear as it would seem. Kamprad gave his shares to the non-profit Stichting Ingka Foundation back in 1982, so he doesn't really own the company. However, because of the structure, he also was calling all of the shots until he stepped down earlier this year. That included wha