Sunday, November 21, 2010

One uncool thing about IKEA

I think almost everything about IKEA is brilliant... except for their tax status. From Wikipedia:

Despite its Swedish roots, IKEA is owned and operated by a complicated array of not-for-profit and for-profit corporations...

The IKEA corporate structure is divided into two main parts: operations and franchising. Most of IKEA's operations...are overseen by INGKA Holding, a private, for-profit Dutch company, [which is] wholly owned by the Stichting Ingka Foundation, ...a tax-exempt, not-for-profit foundation. The Ingka Foundation is controlled by a five-member executive committee that is chaired by Kamprad and includes his wife and attorney.

While most IKEA stores operate under the direct purview of Ingka Holding and the Ingka Foundation, the IKEA trademark and concept is owned by an entirely separate Dutch company, Inter IKEA Systems. Every IKEA store, including those run by Ingka Holding, pays a franchise fee of 3% of the revenue to Inter IKEA Systems. The ownership of Inter IKEA Systems is exceedingly complicated and, ultimately, uncertain. Inter IKEA Systems is owned by Inter IKEA Holding, a company registered in Luxembourg. Inter IKEA Holding, in turn, belongs to an identically named company in the former Netherlands Antilles that is run by a trust company based in Curaçao. The owners of this trust company are unknown (IKEA refuses to identify them).

If this sounds shady as hell, that's because it is.

The Economist has a great take-down article on IKEA, which it calls "an outfit that ingeniously exploits the quirks of different jurisdictions to create a charity, dedicated to a somewhat banal cause, that is not only the world's richest foundation, but is at the moment also one of its least generous. The overall set-up of IKEA minimises tax and disclosure, handsomely rewards the founding Kamprad family and makes IKEA immune to a takeover."


shesthesheriff said...

Yeah I'm surprised you don't hear more people bitching about IKEA. Their furniture is not built to last, its mostly shitty material, and they make sure their stores are in the middle of nowhere so it costs you 15 bucks in gas just to get there and back.

Jonathan Rubin said...

Hey man, our apartment has lots of great Ikea stuff here. Insulted!

Anonymous said...

Wish you had a FB link. I agree the quality of furniture is poor. You're so right about the distance to get to the junkyard.