from the hip

Ingvar Kamprad, Sweden’s richest and the founder of IKEA, has a reputation for being stingy. Now he seemingly wants to change his image. Or perhaps Ingvar Kamprad has found that he may have more money than he needs.

In December he is meeting in a court in the Netherlands, where the foundation which owns IKEA, and which is controlled by Mr. Kamprad, is located, in order to change the bylaws of the foundation so that it may give away money to charities. Presently, it can only give money to “innovations in architecture and interior designs”.

Kamprad, the founder of IKEA, is a very interesting and quite likable guy. He was born on a farm in Sweden (March 30, 1926). His net worth is reported to be 530 billion Swedish kronor, roughly 63 billion USD.

In 1897 his grandfather killed himself with a shotgun when he could not pay the mortgage on his farm and three years after moving his wife and three children from the Sudetenland.

Kamprad’s widowed grandmenother saved the farm from bankruptcy by sheer willpower and hard work.

The founder and owner of Ikea had entrepreneurship and sales in his blood early on as a teenager. He peddled matches, fish, pens, Christmas cards and other items by bicycle. He began selling furniture in 1947.

According to BBC:

By the age of 17 he had formed a small company to enable him to bid for a contract to supply pencils. Within five years he had set up a mail-order firm and was sending goods out with the daily milk round.

Soon afterwards, he snapped up a disused factory and began turning out furniture. His low prices undercut the cosy Swedish cartel of the time which imposed a boycott on Kamprad’s company in the late 1950s.

Kamprad responded by turning to Polish producers for inexpensive components that could be assembled at home from flat packs. The modern Ikea was born.

The acronym IKEA 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.

Kamprad has lived in Epalinges, Switzerland since 1976. According to an interview with TSR, the French language Swiss TV broadcaster, Kamprad drives a 15 year old Volvo, and encourages IKEA employees to always write on both sides of a paper. In addition Kamprad has been known to visit IKEA for a cheap meal. He is also known to buy Christmas paper and presents in the post-Christmas sales.

Kamprad avoids wearing suits, flies economy class and frequents cheap restaurants. He has been quoted as saying that his luxuries are occasionally buying a nice cravat and eating Swedish fish roe. “How the hell can I ask people who work for me to travel cheaply if I am travelling in luxury?”, he says. “It’s a question of good leadership”. Or, as he also says: “I’m stingy and I’m proud of the reputation.”

Kamprad suffers from dyslexia. That has not prevented him from making sucess, but he has admitted that his dyslexia has played a part in the inner workings of the company. For example, the Swedish-sounding names of the furniture sold by IKEA were originally chosen by Kamprad because he had difficulty remembering numeral stock-keeping units.

As well, Kamprad has had a drinking problem. While working with furniture manufacturers in Poland earlier in his career, Kamprad became an alcoholic. However, he has said that his drinking is now under control

While Kamprad’s frugality is well documented, it is also an important part of the carefully managed image. He also owns a villa in an upmarket part of Switzerland, a large country estate in Sweden, and a vineyard in Provence in France. And for several years he drove a Porsche.

But basically, he is a focused, hardworking businessman with a frugal style who does not believe in wasting time.

The Swedes deserve special attention today. Two of their international brands, H&M and IKEA, both fabulous successes internationally, came out on top in a study of European brand names.

H&M is Europe’s second biggest clothing chain. On Thursday it was named Europe’s most valuable brand, beating such rivals as Zara and the British chain store Marks and Spencer. Financial Times writes:

The Swedish-based chain’s brand has a value of €10.37bn, according to the first ever rankings of European retailers by Interbrand, the brand consultants. It is well ahead of the rest of the pack, with runner-up Carrefour valued at €6.6bn.

And, not only that, IKEA, the world famous furniture store, placed at the number three spot on the same list, with a brand name value of €6,5 billion! In addition, that is only the brand name value in Europe – IKEA is a brand name in the US and other parts of the world as well. A great sucess for Sweden!

Here is the complete list of the top European brands:

Copyright The Financial Times Limited 2008