Ikea customers have become accustomed to the convenience of interest-free loans offered on a wide range of products, from Billy bookcases to Malm beds. Now, it seems the furniture giant is poised to further tap into its customers’ financial needs by taking full control of a bank.
Ingka, the entity that owns and operates the majority of Ikea stores worldwide, recently announced its agreement to acquire the remaining stake in Ikano Bank, originally conceived by Ikea founder Ingvar Kamprad. This move, whose financial details remain undisclosed, signifies a potential expansion in Ikea’s offerings, as it gains control of a financial institution that provides services such as mortgages, current accounts, and personal loans.
In a statement to Fortune, Ingka CEO Jesper Brodin highlighted the potential benefits of the Ikano acquisition for Ikea customers. By integrating financial services into its portfolio, Ikea aims to responsibly support its customers in achieving a better home and lifestyle.
The acquisition follows Ingka’s previous purchase of a 49% stake in Ikano in June 2021, granting it the option to acquire the remaining shares over time. Ikano currently operates in eight markets, including Scandinavian countries, Germany, and the U.K., and the deal is expected to receive approval between September and December.
Peter van der Poel, managing director of Ingka Investments, emphasized the synergies between banking services and flatpack furniture, envisioning Ikea’s role in democratizing financial services while expanding sustainable and affordable living options for its global customer base.
Beyond its symbolic significance, the deal represents Ikea’s strategic move to deepen its engagement with customers and extend its reach into their financial lives. As the Swedish furniture giant continues to evolve, this acquisition underscores its commitment to enhancing customer experiences and diversifying its offerings.
What next?
Ikea’s collaboration with Ikano Bank has significantly enhanced the furniture retailer’s ability to offer attractive financing options to its customers in recent years, enabling them to indulge in larger purchases to furnish their homes.
The introduction of the “Ikea loan” has empowered customers to access interest-free financing for periods extending up to five years, facilitating more substantial investments in Ikea’s products. Ikano Bank’s robust financial performance, evidenced by its operating income of 6.5 billion SEK ($618 million) last year, underscores the success of this partnership in driving sales and volume across various markets.
With Ingka now assuming full control of Ikano, Ikea stands poised to explore new avenues for growth and innovation. One foreseeable development is the potential for a more seamless integration between the furniture purchasing process and loan application procedures, streamlining the customer experience.
Of particular interest is Ikano’s expanding mortgage business, which has been nurtured in collaboration with Swedish startup Borgo since 2021. This strategic initiative positions Ikea to not only furnish homes but also finance them, potentially offering customers a comprehensive solution from acquisition to decoration.
As Ikea continues to evolve its business model and expand its offerings, the acquisition of Ikano Bank opens up exciting possibilities for the company to deepen its engagement with customers and further solidify its position as a provider of holistic home solutions.