IKEA values brand at €9bn

13 August 2012

STOCKHOLM: IKEA, the Swedish furniture retailer, believes its brand is worth €9bn ($11.1bn), providing a rare chance to compare official corporate estimates in this area with well-known third party valuations.

The firm reached this valuation as part of a change in ownership structure that saw the brand "sold" by Interlogo, a holding company based in Lichtenstein, to its IKEA Systems arm, located in the Netherlands.

"We'll never be as transparent as a listed company," Anders Bylund, head of group communications at Inter IKEA Group, told the Wall Street Journal. "Our ambition for several years has been to make our business more transparent and easy to understand."

Bengt Håkansson of Brand Clinic, a consultancy in Helsingborg, argued IKEA had successfully demonstrated its brand ideals to shoppers, and built up an extremely loyal audience as a result.

“If you buy IKEA's brand you are simultaneously buying all the customer relations and good will that the company has worked for. That's what you pay for – not the logo," he said.

"IKEA is a brand that is bought to a very high degree. It combines low prices with cultural values. People like IKEA no matter what."

Millward Brown, the research agency, valued IKEA's brand at some $9.2bn in its latest annual BrandZ report. This left it in 89th place among the world's 100 most valuable intangible assets.

By contrast, Interbrand handed the IKEA brand an overall net worth of $11.9bn, meaning it was in 31st position at the global level, a difference indicating the ambiguity surrounding such activities.

"The value of brand is both art and science," Allen Adamson, a managing director of Landor Associates, the branding firm, said.

"It's simple in theory but hard to pin down in reality. It's really about how much would a consumer pay for a caramel colored soda versus how much they would pay for a Coke."

Data sourced from Wall Street Journal, The Local; additional content by Warc staff