To preserve control over the business’s operations and strategic direction, IKEA is privately held, which is one of the key reasons for this. The company can concentrate on long-term objectives rather than short-term financial gain because it is not publicly traded. IKEA is now able to invest in R&D, brand-new store openings, and other projects without having to worry about pleasing shareholders.
IKEA is privately held in order to preserve its distinctive corporate culture. Being private helps IKEA to continue operating in the manner for which it is known for being innovative and attentive to consumer needs. Being private also enables IKEA to maintain the secrecy of its business operations and supply chain, which is critical to preserving its competitive advantage.
IKEA is a privately held firm, yet its financial information is nevertheless open to the public. IKEA reported €39.6 billion in sales in 2020, or nearly €108 million per day. Additionally, the business disclosed a net profit of €1.2 billion. The COVID-19 epidemic did not stop IKEA’s revenue from growing by 4% in 2020.
IKEA is likewise heavily indebted, having €22.5 billion in long-term debt as of 2020. However, the business has been able to keep a good credit rating and has never had any debt repayment concerns.
IKEA has not yet made any plans to raise pricing starting in 2022. The business is renowned for its low prices, which are made possible by a number of factors. IKEA creates all of its own items, buys its materials directly from manufacturers, and ships them in flat-packs to save money on shipping. In order to reduce labor costs, the organization also makes use of self-service choices and effective in-store design.
To maintain control over its business and its distinctive corporate culture, IKEA is a private company. The business has substantial revenue, moderate debt, and a solid financial position. IKEA’s focus on cost effectiveness and consumer value may alter over time, but it is unlikely to do so anytime soon.
IKEA relies on outside carriers to carry its products to consumers’ homes, which is one explanation for why the company could demand expensive delivery fees. Costs may go up as a result, especially for large or heavy items. The lower costs of IKEA’s items, which are intended to be reasonable and accessible to a wide range of customers, may also be countered by delivery fees.