Three possible motives of Kamprad - a man from whom there is something to learn

Ingvar Kamprad, the founder of IKEA, sold the rights to use his brand - one of the most famous in the world - for $11.9 billion. Not to the outside, of course, but to an IKEA subsidiary - the Dutch IKEA Systems. Prior to this, the rights belonged to Interogo, a company registered in Liechtenstein, controlled personally by Kamprad. The transaction amount is quite market value.

The name IKEA appeared in 1943, stands for Ingvar Kamprad Elmtaryd Agunnaryd, where Elmtaryd is his father's farm and Agunnaryd is the local church parish. Today the company has more than 300 stores around the world, and the IKEA brand ranks 89th in the hundred most expensive brands in the world (BrandZ rating).

Why did Kamprad sell the brand? IKEA is not the most open company because it is family-run. Let's try to tell fortunes.

The entrepreneur has always been extremely modest. The fact that Kamprad, already a billionaire (in 2012, with a net worth of $3 billion, he ranked 377th on the list of the richest people in the world), had only a 1993 Volvo 240 GL and preferred to get to the office by bus, is widely known. So the version that he needed money does not even deserve to be put forward.

Version one: tax optimization. Kamprad always used the opportunity to increase business efficiency through legal tax cuts. The parent company of the chain, INGKA Holding BV, belongs to the INGKA Foundation, which in turn belongs to the IKEA Foundation, whose statutory documents stipulate the need to sponsor innovations in the field of architecture and interior design.

This is what the former head of the company Anders Dahlvig writes in his book “IKEA: Build a Dream,” recently published by Mann, Ivanov and Faber: “The modern structure of this company was invented in 1982. The main goal, as Ingvar Kamprad explained, is to protect the furniture company from fragmentation or resale by subsequent generations of owners. Another - admittedly secondary - goal was to optimize tax payments. <…> If I had to express my opinion as objectively as possible, I would say that IKEA is truly tax efficient.” And then he describes in detail why: wholesale trade is managed from Switzerland (there, and not in his beloved Sweden, of which Kamprad, by the way, is a citizen and patriot, and lives), and the cash register and management company are located in Belgium, “in both countries taxation is very favorable.” It is quite possible that the sale of the brand by the Liechtenstein company to the Dutch company at the market price was beneficial to IKEA at the moment.

Version two: age. On March 30, the company's founder turned 86 years old, and Kamprad is famous for his ability to plan for the long term. When in 1996 the company was unable to obtain permission from the Moscow City Hall to build the first store on Kutuzovsky Prospekt, the entrepreneur calmly remarked: “Nothing, we’ll wait.” Today business in Russia is actively developing. It is quite possible that in order to avoid legal difficulties that may arise after his death, he decided in advance to transfer assets from his personal company to a general structure.

Version three: the company is preparing for an IPO and all significant assets need to be consolidated into one structure. The sale of the brand allowed the personal firm to legally receive a large sum, at the same time increasing the value of the business. But personally, I don’t believe in this version. Kamprad was building a family company. The entire ideology of IKEA with its own “Bible” - value system - is family. Yes, and there is economic sense if the company does not need working capital too much: family companies are more stable, which Dahlvig also writes a lot about in his book using the example of IKEA. Kamprad’s grandfather and grandmother, by the way, also owned a family business. And it’s not for nothing that he began handing over the reins of government to his sons twenty years ago.

In any case, there is something to learn.

Why did Ingvar Kamprad sell the IKEA brand?