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IKEA designs and sells affordable flat-pack furniture and home goods through huge out-of-town stores and its website.
IKEA is the company that turned furniture shopping into a treasure hunt. You walk into a giant blue-and-yellow warehouse, follow a winding path past fake bedrooms and tiny kitchens, eat some meatballs, and leave with a flat cardboard box that somehow becomes a bookshelf. The company sells affordable, ready-to-assemble furniture and home accessories — the stuff of everyday life: beds, sofas, storage, lamps, kitchens. Customers pay at the store or online, and they choose IKEA because the prices are low, the design is clever, and the range is enormous.
The flat-pack idea is the engine. Instead of shipping assembled wardrobes, IKEA designs furniture that comes apart into flat boards, which stack tightly, ship cheaply, and can be carried home in a car. The customer does the final assembly, which cuts costs. That single idea lets IKEA sell a chest of drawers for far less than a normal furniture store, and it's why the company can keep prices low while still making money. IKEA makes most of its money from selling that furniture and home goods, not from services. There's a twist in the ownership. The IKEA brand and the global business sit partly with Inter IKEA Group, which owns the concept and supply chain, and partly with Ingka Group, which runs most of the stores. Ingka is the biggest franchisee, operating the vast majority of IKEA stores worldwide. That split exists largely for tax and control reasons, and it means "IKEA" is really a family of companies rather than one simple business. The founding Kamprad family still holds enormous influence decades after Ingrid Kamprad's death.
Ingvar Kamprad was 17 when he started IKEA in a small Swedish town, taking orders and filling them by bicycle. The name came from his own initials, his family farm and his home parish. It was a tiny one-man operation, but it was the seed of the world's largest furniture retailer.
After a few years of selling general mail-order goods, Kamprad added furniture to the range and steered the young company toward home furnishings. His formula for low prices was simple: sell a lot, ship straight from suppliers and keep costs painfully low. That set the direction the company would follow for decades.
One day a table got damaged in transport, so Ingvar and a designer named Gillis Lundgren took the legs off. That small fix became the flat-pack idea: furniture shipped in pieces and assembled at home, which saved space and money. It became central to IKEA's low-cost global model.
IKEA was still mostly a catalogue business when the first store opened in Älmhult, Sweden. It turned the mail-order operation into a physical showroom where people could see and touch the furniture. That store format became the basis for the company's global expansion.
As IKEA grew, Kamprad wanted the company to be free of outside owners and last, as he put it, for an eternity. His answer was to separate the ownership of the retail stores from the ownership of the IKEA concept and brand. That split between Inter IKEA and INGKA still defines the group today.
When Kamprad retired from running the business, he set up three separate management companies: Inter IKEA Group, INGKA Group and IKANO Group. Ownership and management were reorganised into separate entities as IKEA expanded around the world. This cemented the multi-company structure the company still uses.
The Interogo Foundation was set up as the principal owner of Inter IKEA Group, placing the company in foundations rather than ordinary shareholders. This protected IKEA from inheritance fights and takeovers. It preserved the independence Kamprad had been chasing.
At a secret meeting near Copenhagen, Inter IKEA's board agreed to massively expand its role. Inter IKEA took control of design, manufacturing, procurement and logistics from INGKA, the part that runs the stores. The aim was to protect IKEA's future and jolt a static concept into adapting to online and city-centre shopping.
IKEA committed to becoming a climate-positive business by 2030. That same year, founder Ingvar Kamprad died at 91, leaving a strong legacy. It was a generational handover, and the sustainability pledge would shape the company's future.
When Russia invaded Ukraine, IKEA moved fast and closed all 17 of its Russian stores. That left warehouses full of items meant for the Russian market. By the autumn, about 10,000 Russian employees had been laid off.
Juvencio Maeztu succeeded Jesper Brodin as CEO and president of Ingka Group. He had spent 25 years at IKEA and became the first non-Swede to lead the retailer. His arrival came after two straight years of falling sales for the brand.
Jakub Jankowski became CEO of Inter IKEA Group, replacing Jon Abrahamsson Ring. For the first time, both Inter IKEA and Ingka were led by non-Swedes, with tariffs and inflation hanging over the sector. Jankowski set out to bring prices back to pre-pandemic levels so the brand stayed relevant to cost-hit customers.
Inter IKEA announced 850 job cuts, about 3% of its staff, to simplify a structure that had grown too complex. Rising costs, US tariffs and falling demand squeezed the company as it shifted from big suburban warehouses to smaller city-centre stores. The cuts followed planned office job losses at Ingka and aimed to lower the cost base so prices could come down.
IKEA is huge, with annual revenue in the tens of billions of euros, and it faces real challenges. It has been slow to build its online business compared to rivals, and it has invested heavily in new city-centre formats and second-hand or buy-back programs as customers shift habits. Rising shipping and raw material costs squeeze its famously thin prices. Its biggest competitors are other big-box furniture retailers and online players, but IKEA's scale, brand, and flat-pack model remain hard to copy.
Saved answer · last researched 4 Nov 2026