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IKEA’s Ethical Procurement Practices
Background Note
IKEA was established in 1943 by a youngster of 17, Ingvar Kamprad (Kamprad). Kamprad came up with the name IKEA by combining the first letters of his name (Ingvar Kamprad with the first letters of the farm and village in which he grew up (Elmtaryd and Agunnaryd). IKEA began in a shed that was just two square meters in size. Kamprad started his business by buying pens, Christmas cards, matches, cigarette lighters, nylon stockings, and other items in bulk. He sold these items to the residents of Smaland at a reasonable price, but still made healthy profits. To save more money, Kamprad used the trucks that delivered milk to transport his packages. IKEA soon started making money. In 1945, Kamprad started promoting his business through mail order catalogs as conducting individual sales calls had become impossible because of the volume of business. Furniture was introduced in IKEA’s product portfolio in 1947. By 1951, the furniture sales had increased so much that Kamprad decided to discontinue all other products and concentrate solely on selling furniture that was stylish yet low priced. |
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In 1953, the first IKEA shop was opened in Älmhult. By 1955, IKEA had begun designing its own furniture. It also introduced flat packaging at around this time. In 1955, IKEA’s sales were at SKr 6 million. In 1958, the first IKEA showroom was opened. The sales rose to SKr 40 million by 1961. In 1963, IKEA ventured overseas by opening its first store in Norway. In 1965, the first suburban store was opened on the outskirts of Stockholm. That was the time IKEA introduced several concepts like self-service and distributing catalogs. IKEA ventured into Denmark in 1969.
