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CEOs Gone Wild: Ingvar Kamprad


The emperor of IKEA is immune to scandal. Just like his company.

We've all seen them: Those hulking, boxy, blue-and-yellow eyesores squatting at the side of the highway, surrounded by picturesque parking lot as far as the eye can see.
But its architecture isn't the only thing about Swedish furniture behemoth IKEA that says "big box": It uses Third-World workers to keep costs down, turns forests from Borneo to Belize into end tables and has a global reach rivaled only by McDonald's (MCD). What's more, IKEA expands more aggressively than a Spanish conquistador, creating environmental and planning concerns for cities around the world.

The IKEA catalogue now trumps the Bible as the world's most published work, with almost 200 million copies distributed each year.
Minyanville's CEOS Gone Wild

So why doesn't IKEA inspire the same fury that McDonald's -- or Wal-Mart (WMT), or Nike (NKE) -- do?

In part, it's IKEA's willingness and ability to address charges of exploitation, often before they're even made: The firm has, for example, summarily fired suppliers found to have abusive labor practices.
But it may have even more to do with Ingvar Kamprad, the firm's notoriously eccentric founder; like IKEA itself, Kamprad seems impervious to the kind of public-relations catastrophes that would obliterate lesser companies.

For example, IKEA met with a warm reception when it first opened in Israel - despite the fact that, in 1994, Kamprad was revealed to have been a member of Swedish pro-Nazi groups during World War II. The founder did say that it was "a part of [his] life which [he] bitterly regrets."

But Kamprad remains drawn to strong opinions, strongly expressed. In 1976, he authored The Furniture Dealer's Testament, whose prose sounds uncomfortably like a political manifesto: "It is our duty to expand...Those who cannot or will not join us are to be pitied. What we want to do, we can and will do...To a glorious future!"

Even for a Swede, Kamprad's not exactly what you'd call easygoing.

The Testament also declares "wasting resources" to be "a mortal sin," and cost-cutting is Kamprad's religion. IKEA aims to cut prices by about 3% every year; Kamprad himself drives a 15-year-old Volvo which he occasionally sleeps in on business trips, to save money on hotels (conservative estimates of his personal wealth put it at around $40 billion, making him the 7th richest man in the world).

Kamprad even refused to cut the ribbon on the statue of him erected in his hometown; instead, he untied it, folded it, and handed it to the mayor, saying "Now you can use this again."

Perhaps that's why he's so obsessively secretive about IKEA's bottom line. The company is privately held, never releases earnings reports and has a labyrinthine business structure. Some say this enables IKEA to evade both public scrutiny and tax obligations. The Ikea Group is actually owned by the Stichting Ingka Foundation, a charitable trust based in Holland and controlled by Kamprad and his 3 sons.

Perhaps the strangest chapter in the Kamprad story centers around those sons: In a move out of the pages of a fairy tale (or maybe King Lear), he once declared that the IKEA empire -- and the family fortune -- would go to whichever of the 3 was most successful in running his branch of Habitat, the slightly more upscale furniture chain IKEA bought in 1992.

But with Habitat locations closing their doors all over the UK, IKEA's acquisition of the firm is now being called "a debacle."

No word yet on whether the Kamprad boys will be asked to pay with their lives.
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