Ikea boss sets heirs the Habitat test

Click to follow

Habitat is being used by its eccentric billionaire owner to decide which of his three sons will take over his Ikea empire.

Habitat is being used by its eccentric billionaire owner to decide which of his three sons will take over his Ikea empire.

Ingvar Kamprad, founder of the £19bn Ikea fortune, is transferring ownership of the stores he acquired from Storehouse to his three sons, Peter, Jonas and Matthias. Insiders reckon that the second-generation triumvirate, all in their 30s, will be given their head at Habitat over the next few years and that whichever of them makes the biggest impression will take over from dad and run the entire Ikea show.

It is the latest unconventional move from the 74-year-old Kamprad, who founded Ikea as a mail-order business in 1943 and built it into a worldwide chain. In the process he has become Europe's richest man, notorious for his preference for second-class travel and discount shopping.

The test he has now set his heirs is to see how they push up profits at Habitat, the chain that came to symbolise the very idea of interior style to Britons. Shoppers and style analysts will now be eagerly watching the stores' range for signs of new brooms at work.

Founded by Terence Conran, Habitat burst onto the retail scene in the Sixties and rapidly became synonymous with an inventive alternative to the way your parents' homes looked. In place of chintzy sofas, antimacassars and dark wood, you could now have stripped pine, chrome kitchen chairs, wicker baskets and glasses that didn't look like they came from a saloon bar.

As Conran's success spread, with a succession of stores around the country, other stores found they had to stock the kinds of home goods that constituted "the Habitat look". But during the1980s the chain ran into financial difficulties and Ikea pounced. They bought the stores, for an unknown sum, in the early 1990s.

The move showed that Conran - a pioneering designer - may have had the vision, but it was the Swede who landed the bigger financial punch.

The out-of-town retail giant, best known for its self-assembly Scandinavian furnishings and frustrating returns procedure, is now an international phenomenon. From a single store in Almhult in 1958, Kamprad now controls 155 outlets in Europe, North America and Russia, with others due to open in Peking and Shanghai.

The way in which ownership of Habitat, which is contained in one of his three holding companies, is being passed on to his offspring is typical of Ikea's Byzantine structure. Kamprad makes no apology for the complex structure, which is designed not only to minimise the tax burden but to guard against family squabbles: "I've paid an awful lot of money to protect what I've built," he says. "I can only hope the money was well spent."

Kamprad's decision to cede control of Habitat is the first sign that the septuagenarian may be taking a step back from the business which has occupied him since he was 16. However, in an interview with Forbes Magazine, to be published next month, he indicated he had yet to decide which son would come out on top.

"I admire my sons," he said. "They're very clever. But I don't think any of them is capable of running the company, at least not yet."

Unusually, in an era when businessmen can barely wait two minutes before cashing in their chips with a stock market flotation, he is unwilling to undergo the public scrutiny that a sale would involve.

"I feel many responsibilities - to our customers, to our employees, to the environment, to the world at large," he told Forbes. "But I don't want to feel responsible to investors, to outsiders with financial concerns that may differ from those of the welfare of Ikea. Investors are too greedy. I don't blame them, it's their money. But they want steady and constantly bigger returns."

To say that Kamprad has enjoyed "steady and constantly bigger returns" since launching Ikea is an understatement. But Kamprad himself remains modest, unassuming and, it has to be said, tight.

Natives of his birthplace, Smaland, a rocky region south of Stockholm, are to other Swedes what allegedly parsimonious Scots are to the English. Despite his wealth, he surfs the internet for cheap flights, patronises discount shops and waits for bargains at the vegetable market in the Swiss village near Lausanne which he calls home. Anything else would be hypocrisy, he says.

"Why do I take cheap air trips? Take second-class train rides? How the hell can I ask people who work for me to travel cheaply if I am travelling in luxury? It's a question of good leadership."

Whether it is Peter, Jonas or Matthias who succeeds their father, it is a safe bet that all three will enjoy the family money rather more than him.