Who Owns IKEA?

The corporate structure of IKEA is elaborate, as it comprises several companies and owners.

But who owns IKEA?

The IKEA brand has two different owners, in fact. Firstly, the IKEA Group is owned by INGKA Holding B.V. and the Stichting INGKA Foundation. Next, the IKEA Group is a franchisee, and it pays Inter IKEA Systems 3% in royalties.

Why is this important?

Let’s take a closer look and find out…

Contents

The IKEA Group and Inter IKEA Systems

IKEA’s organizational structure is complicated. Many people think the same people own, run, and operate both the IKEA brand and the IKEA stores. However, this is not the case. The structure of this business is much more intricate.

It is Important to Distinguish Between Two Entities:

INGKA Holding B.V. runs the IKEA Group, while Inter IKEA Systems B.V. is in charge of the IKEA global franchises.

Therefore, IKEA Group and Inter IKEA have independent owners and business strategies:

The franchisee, IKEA Group, manages IKEA stores. It is held by INGKA Holding B.V., which is, in turn, owned by the Stichting INGKA foundation.
Inter IKEA Holding B.V. owns Inter IKEA Systems, the global franchisor, and the IKEA Concept.

Let’s explore this peculiar ownership structure in greater depth.

The Ownership Structure of IKEA Group Holding

As mentioned, the IKEA Group is owned by INGKA Holding B.V and the Netherlands-based Stichting INGKA Foundation. Income generated by IKEA is used in two ways: reinvested into the IKEA Group or donated to charity through the foundation.

The IKEA Group manages sales centers, retail, customer service, and other services associated with IKEA products. This includes service functions, financial assets, and group functions such as marketing and communications.

The Ownership Structure of Inter IKEA Holding

INGKA Group and Inter IKEA Group share the same founder, history, and heritage. However, the two businesses have been run by different owners and executives since the 1980s. Interogo Foundation, a Liechtenstein-based organization, founded in 1989, is the owner of Inter IKEA Group.

Inter IKEA Systems manages processes, product delivery, employee training, and other associated tasks in accordance with the franchise agreements:

IKEA range and supply: As of 2017, manages 24 purchasing offices, 9,500 IKEA goods, and 1,000 household goods suppliers throughout 51 countries.
Production: The IKEA Industry operates 40 facilities as of 2017.
Franchising: 11 different franchise contracts through Inter IKEA Systems B.V.

According to IKEA, the franchising system is improved and simplified by this framework. This also makes it easier to improve customer focus and plan for future expansion.

The IKEA Group’s Business Model

As we know, the IKEA Group operates under a franchise system. All franchisees must pay 3% in royalty fees to Inter IKEA Systems B.V., which serves as the franchisor.

Sales And Revenue

The corporation had over €36 billion in sales in September 2017. Additionally, they made €3 billion in operational income and approximately €2.5 billion in net income.

In 2017, Their Top Retail-selling Countries Were:

Germany – 15%
America – 14%
France – 8%
The UK – 6%
China – 6%

Retail sales per region were:

Europe – 66%
Americas – 19%
Asia Pacific – 11%
Russia – 4%

Since 2008, revenue growth has been rapid. The IKEA Group saw an almost 70% increase from €21.5 billion to €36.3 billion in 2017.

The Inter IKEA Systems Business Model

Inter IKEA Systems is the franchisor for the IKEA Group. In their franchise agreements, the franchisees are allowed to run the stores using the IKEA name and concept. This gives them access to IKEA’s methods, systems, and procedures. These include instructions, store designs, display ideas, and employee training.

Three key operating segments provide Inter IKEA’s revenue source: franchise fees, wholesale product sales to merchants, and other income. In 2017 they made a revenue of €23 billion. They stated that its performance had significantly improved after the acquisition of several IKEA groups in August 2016. This includes IKEA Industry AB, IKEA of Sweden AB, and IKEA Supply AG.

The IKEA Franchise System

Founder Ingvar Kamprad decided to implement a franchise system to protect the IKEA concept. He wanted complete autonomy and long-term ownership. He believed that before they could expand, all businesses using the IKEA name had to increase their resources. Thus today, all IKEA stores operate under a franchise system, excluding the IKEA Delft store in the Netherlands.

The Following Constitutes The Entire Franchise System:

IKEA assignments – this includes production, supply, communication, and sales.
Franchise agreements between IKEA, INGKA, and ten more franchisees.

The IKEA franchising system values partnerships and encourages participation from everyone. It creates an interconnected framework. This serves as a strong foundation for the IKEA Brand, allowing for an optimized and dynamic value chain.

Looking To Join The IKEA Family?

Then why not apply to the world-renowned store? Sound like fun? Well, check out our in-depth guide to the Ikea Application and the most common Ikea Interview Questions you’re likely to be asked in 2023.

Alternatively, we also have our home improvement stores for job opportunities. Check out our guide to the Home Depot Application and most frequently asked Home Depot Interview Questions, as well as the Lowes Application, including the Lowes Mission And Vision Statement Analysis, for a better insight into the company.

Before you apply, find out How Old Do You Have To Be To Work At Home Depot and How Old Do You Have To Be To Work At Lowes if you’re still in school, along with How Much Does Home Depot Pay for your hours and salary, and the Home Depot Dress Code to make sure you look professional on your first day.

Final Thoughts

The answer is somewhat complicated due to the many controlling groups and entities involved. But basically, the IKEA Group is owned by the Stichting INGKA Foundation and INGKA Holding and continues to grow worldwide.

The IKEA brand is extensive due to its successful franchising systems. It addresses Ingvar Kamprad’s three ambitions: enabling IKEA to stay entrepreneurial, aiding international expansion, and maintaining the IKEA Concept’s strength and coherence.

That’s pretty impressive if you ask me!

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