Business

Ikea founder steps down as son takes reins of Swedish firm

Ingvar Kamprad, founder of IKEA
Image caption Ingvar Kamprad founded Ikea 70 years ago in the Smaland province in southern Sweden

The founder of Swedish furniture giant Ikea is to step down from the board of the firm, with his son taking on the role of chairman.

Ingvar Kamprad founded the flat-pack furniture company in southern Sweden 70 years ago.

His youngest son, Mathias Kamprad, has been appointed chairman of Inter Ikea Holding SA, the company that owns the Ikea brand.

The news came as Ikea announced a sharp rise in profits for 2012.

Family dynasty

The 87-year-old founder of Ikea said it was a good time for him to step down and his son was "well prepared for his new assignment".

"We are also taking another step in the generation shift that has been ongoing for some years," he said.

But Ingvar Kamprad, a billionaire who has lived in Switzerland since the 1970s, added he would keep offering his ideas and views.

"I will continue to spend time in the stores and in the factories to work with people and help achieve constant improvement," he said.

Before being made chairman, Mathias Kamprad served as director of the board.

He stressed that his appointment meant that it was "business as usual".

"Our main task will always be to ensure a long life for the Ikea concept by keeping the needs of the many people in mind," he said.

The Kamprad family retains control of the Ikea group, which has a complex corporate structure.

Ingvar Kamprad is chairman of Stiching INGKA Foundation, which controls Ikea Group, the owner of 302 of the 343 Ikea stores globally.

He also sits on the board of the family-controlled Interogo Foundation, which owns Inter Ikea Group.

Challenging market

On Tuesday, Inter Ikea Group, which takes a 3% cut of Ikea stores' worldwide sales each year, reported a 2012 net profit of 443m euros ($579m; £377m).

This was up strongly from 87m euros the year before, chiefly due to a one-off gain.

Chief executive Soren Hansen said the business climate in Europe, where most of Ikea's stores are based, remained challenging, especially in southern Europe.

"What we feel happy about is that we can see that the Ikea concept has stood up relatively well," he said.

"We have in some markets become more relevant, meaning that in some markets we are gaining market shares."

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