Ikea’s Kamprad: Six to eight Ikea stores would suffice for Finnish clientèle

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A few years ago the Swedish furniture giant Ikea transferred most of its purchases from Finland to countries with cheap labour, and many Finnish subcontractors went bust. Ikea’s Finnish purchasing department was shut down two years ago.
      According to Ingvar Kamprad, the 81-year-old founder and main owner of Ikea, the retailer will concentrate its future European purchases in Poland and outside Europe in Ikea’s own factories.
      However, Kamprad believes that Finland could be in a position to cooperate with Ikea and offer furniture to Russia. The only obstacle would be logistics. He does not want to see his products getting stuck for days in a long queue of trucks, waiting to cross the eastern border.
     
Ikea is still buying from some Finnish suppliers.
      "Incap Furniture is still one of our major suppliers", Kamprad notes. Moreover, half of the paper for the Ikea catalogue, with some 191 million copies in print, is bought from Finland.
      However, Ikea also intends to sell more in Finland, planning to expand its operations in the country.
      Finland’s first Ikea department store was opened in Espoo in 1996, while the second, larger one was established in the neighbouring city of Vantaa in 2003.
      Next summer, another Ikea retail store, about the same size as the Vantaa one, will be completed in Raisio, close to Turku, while Finland’s largest Ikea department store is scheduled to open in Tampere in 2009.
      At that point, around half of Ikea’s expansion programme will have been completed. According to Kamprad, a total of six to eight blue-and-yellow Ikea stores will meet the needs of the five-million clientèle.
     
Ikea arrived in Finland relatively late, and initially it was feared that the store would eat all Finnish furniture retailers out of the market. The fear was highly exaggerated.
      According to the 2006 statistics issued by the Association of Finnish Furniture Retailers, Ikea’s furniture and furnishing sales in Finland amounted to some EUR 136 million last year. In terms of market shares, Ikea was the third, with its share of 10.6 per cent. The two larger retailers in the interior decoration branch were Indoor Group and Kodin Ykkönen, both owned by the Finnish retail specialist Kesko.
     
Apart from private ownership, Kamprad includes in the success factors of Ikea the fact that the company avoids all kinds of showing off. Moreover, Ikea takes good care of its personnel and its product range is based on inexpensive products, suitable for ordinary people.
      While not willing to discuss his plans for the future of Ikea, Kamprad jokingly mentioned that he intends to run his empire still for at least another 25 years. Besides, he said that all his three sons are involved in the operation of the company already today.


Links:
  IKEA
  The Association of Finnish Furniture Retailers

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