Cheap is good, says furniture magnate

Keystone

Ikea founder Ingvar Kamprad, Switzerland's richest man, has explained his legendary frugality during a rare interview on Swiss television.

The billionaire Swede, who has lived in Switzerland for nearly 30 years, drives a 15-year-old car and always flies economy as an example for his 90,000 employees.

The furniture store founder’s fortune was recently estimated at $28 billion (SFr36.7 billion) by Forbes magazine – trailing only Microsoft co-founder Bill Gates, United States investor Warren Buffett and Mexican industrialist Carlos Slim.

Kamprad, who hardly ever talks to the press for security reasons, has, however, complained to the magazine that his wealth is nowhere near the stratospheric heights journalists claim it is worth.

The Swiss financial weekly Bilanz still estimates that the Swede’s fortune could reach SFr21 billion.

He does admit to being frugal though.

“People say I am cheap and I don’t mind if they do. But I am very proud to follow the rules of our company,” Kamprad told TSR, the French-language television arm of the Swiss Broadcasting Corporation, swissinfo’s parent company.

Asked to confirm that he drove an old Volvo, said the thrifty Swede, who turns 80 on March 30: “It is nearly new, just 15 years old, or something like that.”

Interviewer Darius Rochebin teased him that Ikea employees were always told to write on both sides of the paper.

“Why not? If there is such a thing as good leadership, it is to give a good example. I have to do so for all the Ikea employees,” Kamprad retorted.

“Everything we earn we need as a reserve,” he added.

“We have to still develop the Ikea group. We need many billions of Swiss francs to take on China or Russia.”

Opportunity

Ikea is the world’s biggest furniture retailer, with 202 stores in 32 countries. Known for its inexpensive self-assembly furniture, the family-owned business claims its hefty catalogue is the most widely read publication after the Bible.

After flirting with neo-Nazism after World War Two – for which he has apologised – the small-town Swede set up shop in his garden shed, selling watches, pens and Christmas cards.

When Sweden’s centre-left Social Democrat government launched the “Million Homes Project” in the 1950s, he saw an opportunity and got into the furniture business.

He stumbled upon the “flat-pack” idea in 1956 when an employee took the legs off a table to fit it into a customer’s car. It saves a fortune in transport, storage and sales space.

“Our idea is to serve everybody, including people with little money. We have to keep costs down,” he said during the interview.

His home in the Swiss village of Epalinges near Lausanne is mainly decorated with Ikea furniture, apart from a few family pieces.

In keeping with Swedish tradition, Kamprad said he prepares and brings glogg, or hot wine, to “good neighbours” at Christmas along with his three sons.

Last week, he made a rare public appearance to announce a SFr500,000 donation ($381,000) to the Lausanne cantonal art school.

swissinfo with agencies

In brief

The name Ikea comes from the initials of Ingvar Kamprad, I and K, plus the first letters of Elmtaryd and Agunnaryd, which are the names of the farm and village where he grew up.

Today, the Ikea trademark represents more than 200 stores in over 30 countries, representing more than 90,000 co-workers.

Key facts

Ikea turnover in 2005: €15.2 billion (SFr24 billion).
160 million catalogues distributed around the world.
453.8 million visitors/customers.
221 stores.
The first Ikea store opened in Switzerland in 1973.