The Swedish furnishing company IKEA is so huge that it uses 1 percent of all lumber in the world. It's finances are equally super-sized. In the business year of 2016, its revenues amounted to 34,2 billion euros and 783 million people visited its stores. IKEA's founder Ingvar Kamprad is consistently ranked as the richest man in Sweden by the business magazine Veckans Affärer.The behemoth size of IKEA gives its economics some quirky characteristics, as pointed out in an article by FiveThirtyEight. This version of 'Poäng' is sold for 995 crowns in Sweden.Take one of IKEA's signature furnitures, the chair 'Poäng', for instance. It has been around for four decades. It was inspired by the Finnish designer Alvar Aalto, whose 'armchair 406' can sell for over 4 000 dollars. Ikea's 'Poäng' initially was sold for a fraction of the price of 'armchair 406'. Now 'Poäng' is sold for a fraction of the price it originally debuted at.FiveThirtyEight points out that 'Poäng' was sold for over 300 dollars in the early 90s, adjusted for inflation.
Today the price is 79 dollars.It should be noted that 'Poäng' has changed slightly since the early 90s. Some steel parts have for instance been replaced by wood, allowing a lower shipping cost."I think this is a pattern for products that survive for a long time. Basically, they won't survive unless they're cost effective. I think the economies of scale really kicked in for that chair", said Marianne Baxter, an economist who has studied data from IKEA catalogs, to FiveThirtyEight.She points out several other quirks with the pricing of IKEA's products. Pricing is different in different countries. Price increases are done bits by bits. Price decreases on the other hand, are large and conspicuous.Basically, it boils down to the fact that the Swedish company is navigating uncharted territories in terms of economics."IKEA continues to be nearly unique. I would've told you that they would have competitors all over the place by now, 15 years ago. I would've been horribly wrong. There's only them", she said to FiveFirtyEight.NOW READ: Former IKEA boss reveals the trick to going through a store in 5 minutes
Ikea says it will make its biggest ever round of price cuts this year as the British arm of the Swedish furniture retailer plans to double sales by 2020. The retailer said it was spending £27m on reducing prices across its stores, "the largest investment into lowering prices we've ever made in a single year". The announcement came as it revealed that Britons’ love of flat pack furniture has seen them spend £1.4bn at Ikea in the last year, with demand for energy efficient kitchen appliances and sofa beds boosting UK sales. Ikea, which opened its first UK store in Cheshire in 1987, is on an aggressive expansion spree in under Gillian Drakeford, who took charge of the British arm last summer. Ms Drakeford said last year she wanted to double sales and market share within seven years, and the company said an 11.3pc increase in revenue in the 12 months to the end of August “shows strong movement towards this reality”. Ikea has become a favourite among households looking for affordable home furnishings, and the group said much of last year’s increase was down to customers downsizing or looking to cut corners.
Sales of “sustainable life” items such as solar panels, LED lightbulbs and efficient appliances increased by 27pc, and the company said demand for its two-in-one sofa bed reflected more people living in small spaces. Online sales increased by 27pc and now account for a tenth of revenue, but Ms Drakeford said this had not had a negative impact on its bricks-and-mortar stores, where visitor numbers rose by 5pc. Ikea is opening stores in Reading, Greenwich, Exeter and Sheffield, and said that “additional sites are being considered as part of our plans”. “We are continuing to explore expansion opportunities in the UK as we believe our physical stores will be just as important as our digital channels,” Ms Drakeford said.Tips on rehabilitating an Ikea Poäng chair? December 28, 2014 Subscribe We have an Ikea Poäng chair. It's comfortable and the frame is in fine shape. The foam cushioning is in pretty good shape too. The fabric cover, however, is in rough shape. It's seen a lot of use and spent too much time in direct sunlight.
It's (unevenly) faded and worn. Have you had a good experience replacing the cover through a third-party company? The current fabric cover reflects the mistakes of youth. We'll take better care of the next one. But where should the next one come from? Ikea sells a handful, but it would be great to replace it with something a little more visually interesting. Some of these covers from Bemz, for example, look pretty cool, although a little pricey. I've seen some on Etsy, too, though nothing that really grabbed me. One thing that gives me pause is that the options from Bemz say they do not fit our version of the Poäng, which looks like this with the folded-over headrest that does not have foam in it. We'd be more than happy to purchase some more foam, though, if that's all it took to make it work. (In fact, we may replace the foam entirely when we replace the cover just to breathe some new life into it.) So have you found any third-party Poäng covers that you like? We might be willing to spend up to $200 for something that was durable, washable and attractive.
If it was cheaper than that, we'd be very happy. We've ruled out white and very loud patterns, but beyond that we're flexible. Oh, and while we're in Canada, shipping to the U.S. is probably an option via relatives.The iconic Billy bookcase from Ikea helped transform the Swedish retailer into a global giant, cemented its reputation as the go-to source for stylish, inexpensive knock-down furniture, and made Ikea’s Scandinavian founder Ingvar Kamprad a billionaire.In the Jysk Bed Bath Home store in Surrey, B.C., the Danny bookcase stands amid oddly familiar looking futons, desks and chairs. Never heard of Jysk (pronounced Yisk)? It’s a Danish retailer that’s emerged as a global giant, is known for inexpensive knock-down furniture, and has made its Scandinavian founder Lars Larsen a billionaire. Oh, and with the exact same dimensions and style as Billy, Danny just happens to be 15 per cent cheaper, too. Jysk: the poor man’s Ikea. Over the past 15 years, Jysk has plotted one of the stealthiest, albeit quirky, retail invasions in Canada.
From its Canadian head office near Vancouver, the discount chain operates 40 stores from coast to coast, yet has almost no national brand recognition. Now, while the retail world is abuzz over Target’s impending arrival from the U.S. in 2013, the Danes are plotting a hyper-expansion of their own here. Jysk is set to open at least 20 new stores a year over the next three years in a bid to make Jysk a household name. “We’ve survived and thrived for 15 years by offering Canadians quality for the lowest price,” says Ludvik Kristjansson, the CEO of Jysk’s Canadian operations. “I see no limit to how much we can grow.” Jysk may not have anything like the profile Ikea enjoys, but its rise has been ambitious nonetheless. From his first store in the Danish port city of Aarhus in 1979, Larsen quickly rolled out the chain across the region. With an early focus on bedding, Larsen soon became known as the “King of Duvets” in Europe. (The company says it sources more duvets and pillows than any other retailer in the world.)
Today the company boasts 1,750 home furnishing stores in 34 countries, with three new stores opening each week. Jysk’s first foray into Canada came in 1996, in Coquitlam, B.C., of all places. The store was set up by Jakup Jacobsen, an Icelander-Dane who had bought the franchise rights for North America and Eastern Europe from Larsen. Kristjansson, a native of Iceland who’d been working in Montreal at the time at a grocery chain, joined the company the following year. He recalls a tough few years at first, as Jysk struggled to open additional stores throughout B.C.’s Lower Mainland. But gradually, Jysk spread out across Western Canada. Then, five years ago, the first Ontario store popped up in another unlikely location—Windsor. The chain now has 16 stores east of Winnipeg and plans to eventually boost that number to 80. Kristjansson sees a three-year window of relative peace for Canadian retailers to strengthen themselves before Target’s arrival, so in addition to opening new stores, Jysk is investing heavily to revamp its existing outlets.
By 2015, Kristjansson predicts a brutal price war unlike anything Canada has ever seen will break out—and it’s one he intends to win. Those who visit Jysk stores will no doubt be struck by the Ikea-ness of many of its products. The Poäng rocking chair, another famous standby at the Swedish retailer, has a doppelgänger at Jysk named the Kastrup that can be had for 30 per cent less. In online consumer forums, shoppers regularly compare items from the two stores and debate their merits. Some see no difference, while others claim Jysk products are less sturdy, though both chains import most of their goods from China anyway. Jysk makes no effort to conceal the similarities between itself and Ikea. “There is room for two or three Scandinavian partners in Canada as long as you stay in your quality and price range,” says Kristjansson. “The strategy is not to go around Ikea or on top of them, it’s just to go with them, and has been from day one.” It helps that Jysk stores, at around 20,000 square feet, are tiny by comparison.
The Ikea store in Coquitlam could fit seven hockey rinks. As such, Jysk is able to target smaller markets like Kamloops, B.C., Lethbridge, Alta., and, later this year, Kitchener and Barrie in Ontario. “There might be room for 20 Ikeas in Canada, but there’s room for 200 Jysks,” he says. All’s fair in love and knock-down furniture, it seems. In a statement, Ikea spokeswoman Madeleine Löwenborg-Frick said the company welcomes the competition. “While other retailers may have products that compete with parts of the Ikea offer, our clear point of difference is the width and depth of our range with over 8,500 products,” she said, adding Ikea will soon open a new store in Winnipeg and replace stores in Ottawa and Richmond, B.C., with ones twice the size. Well, that, and the Swedish meatballs. With Jysk’s razor-thin margins, the company says its sole focus is to sell inexpensive home furnishings, and there are no plans to open in-store restaurants or sell food like its larger rival.