IKEA is a company that produces ready-to-assemble furniture, home appliances, and kitchen appliances among other goods. It also offers home services. The company was founded in 1943 by Ingvar Kamprad in Sweden. Headquartered in Delft, Netherlands, IKEA operates 433 stores in around 52 countries worldwide. As of 2019, it had 211,000 employees and a revenue turnover of $45.4 billion. IKEA is the largest furniture retailer in the world.
|INDUSTRY SECTOR||Furniture Retail|
IKEA alternatives include: Zara Home, Ashley Furniture Industries, American Woodmark, Cost Plus World Market, and Urban Outfitters.
How IKEA Makes Money
Since 2008, IKEA has held its spot as the world’s largest furniture retailer. While it has other household goods on sale, it primarily deals in furniture. The company makes most of its money from franchising. Franchisees pay an annual fee to use the brand in their stores. But it also operates company-owned stores that sell its products directly to consumers.
Founded in 2003, Zara Home is headquartered in A Coruña, Spain, and primarily produces a number of housewares. It is a subsidiary company of Inditex Group. Zara Home operates about 408 stores in 44 countries around the world. It has 152,854 employees and made $830 million in revenues in 2019.
Zara Home is one of the cheaper alternatives to IKEA. Its collection of homeware is also amazing. But it has a presence in fewer countries compared to IKEA and made only a fraction of sales that IKEA had.
Ashley Furniture Industries
Ashley Furniture Industries was founded by Carlyle Weinberger in 1945. Headquartered in Arcadia, Wisconsin, the company sells home furnishings and accessories through company-owned stores and also independent furniture dealers. Ashley Furniture Industries runs a number of manufacturing and distribution facilities across the US. It has 31,000 employees and made $5.7 billion in revenues.
While both IKEA and Ashley Furniture are established brands that produce well-made and fashionable homeware. But IKEA sells build-it-yourself furniture that comes with tools and instructions on how to assemble. On the other hand, Ashley Furniture produces a traditional type of furniture that is pre-assembled. Ashley is the world’s largest furniture manufacturer and has stores in over 123 countries.
Don Mathias, Bill Brandt, Jeff Holcomb, and Al Graber founded American Woodmark in 1980. The company is headquartered in Winchester, Virginia, and employs over 10,000 people. It specializes in kitchen and bath cabinet production and operates 9 production facilities across the US. American Woodmark earned $1.25 billion in revenues in 2019.
American Woodmark offers more than 500 unique cabinet styles in different materials, designs, and texture. The company has four major furniture brands that include American Woodmark, Waypoint Living Spaces, Shenandoah Cabinetry, and Timberlake Cabinetry. Its wide range of products and unique styles make American Woodmark one of the top IKEA competitors.
Cost Plus World Market
Founded in 1958, Cost Plus World Market is a chain of specialty stores that sells homeware besides international food products and drinks. The company is headquartered in Alameda, California. It was acquired by Bed Bath & Beyond in 2012. As of 2019, World Market had 6,127 employees and a revenue turnover of $1 billion.
World Market is a cheaper alternative to IKEA. But since its acquisition, it has been swallowed by Bed Bath & Beyond and has been on a decline. Some of its stores have been closed down or converted to Bed Bath & Beyond stores.
Headquartered in Philadelphia, Pennsylvania, Urban Outfitters is a lifestyle retail company. It was founded in 1970 by Richard Hayne, Judy Wicks, and Scott Belair. It operates around 248 stores in the US, Europe, and India. Some of its brands include Anthropologie, Free People, Terrain, and BHLDN. As of 2019, Urban Outfitters had 24,000 employees and a revenue turnover of $3.98 billion.
As an alternative to IKEA, Urban Outfitters has been modeling its business to mirror that of IKEA. In 2014 it announced that its Anthropologie brand would operate on the same model as IKEA. This is a direct stab at IKEA’s customer base.
Pier 1 Imports
Pier 1 Imports was founded by Luther Henderson in 1962 as Cost Plus Imports. The company rebranded to Tier 1 Imports in 1966 with its headquarters in Fort Worth, Texas. It grew from 16 stores to over 900 stores in 2020. Pier 1 Imports specializes in imported home furnishings and decors such as furniture, decorative accessories, table-top items, and seasonal decor. As of 2019, the company had 18,000 employees and a revenue turnover of $1.6 billion. Pier 1 Imports filed for bankruptcy at the beginning of 2020 and announced plans to close all its stores.
Pier 1 Imports is about to be defunct. It joins the list of many companies across different industries that couldn’t withstand the impact of the COVID-19 pandemic. In its prime, the company was one of the best alternatives for IKEA as far as distinctive and good value products were concerned. Pier 1 Imports primarily imported its products from India and Asia, two regions reputed for good home furnishings. It will surely leave a void in the market where it made a mark despite how crowded the industry is.
Wayfair is an eCommerce company headquartered in Boston, Massachusetts. The company was founded by Niraj Shah and Steve Conine in 2002 as CSN Stores. It only rebranded to Wayfair in 2011. Wayfair deals in furniture and home furnishings under the brands Perigold, Birch Lane, AllModern, Joss & Main, and Wayfair. The platforms have about 14 million items sourced from over 11,000 suppliers around the world. As of 2019, Wayfair had 16,985 employees and a revenue turnover of $9.1 billion.
Wayfair is strictly an eCommerce company with warehouses spread across the United States, Canada, Ireland, Germany, and the United Kingdom. Users can shop for both indoor and outdoor furniture. Its wide range of products and quality customer service, Wayfair is one of the top IKEA alternatives. It is also preferred by shoppers who want to buy stuff from the comfort of their homes even though IKEA also has an online shop. Besides that, Wayfair is cheaper compared to IKEA.
Headquartered in San Francisco, California, Williams-Sonoma is a consumer retail company that deals in home furnishings and kitchen-wares. Its brands include Williams Sonoma, Williams Sonoma Home, Rejuvenation, Mark and Graham, West Elm, PBteen, Pottery Barn Kids, and Pottery Barn. The company operates about 625 stores in over 60 countries around the world. As of 2019, Williams-Sonoma had 28,200 employees and a revenue turnover of $5.67 billion.
Both IKEA and Williams-Sonoma are among the top eCommerce platforms in the United States. Williams-Sonoma mirrors IKEA to a certain point, even launching its own stores in India months after IKEA. But Williams-Sonoma is considered a more mature and classier alternative for IKEA. A survey by Vox revealed that shoppers stop going to IKEA in their 30s and instead opt for home improvement-focused retailers such as Williams-Sonoma.
Kartell is an Italian-based company headquartered in Noviglio, a commune in the Province of Milan. It was founded in 1949 as a manufacturer for automobile accessories by Anna Castelli Ferrieri and Giulio Castelli. It later shifted production to contemporary plastic furniture and other home furnishings in 1963. Kartell’s first store in the United States opened in 1998 in New York City. Besides its stores, the company also sells its products through independent retailers. In 2019, the company made $325 million in revenue. It has 127 employees. Kartell is a subsidiary company of Felofin.
Compared to IKEA, Kartell is a small furniture brand that is yet to make its mark on the global stage. But it is not totally lost in IKEA’s shadows. Kartell also has some masterpieces, including a Masters chair that was designed by French architect Philippe Starck. The company needs to spread its wings beyond Italy and the United States if it is to grow further.
Natuzzi was founded by Pasquale Natuzzi in 1959. It is a furniture company headquartered in Santeramo in Colle, Italy. Natuzzi designs and sells armchairs and sofas besides other living room accessories. It is the largest furniture house in Italy and has the biggest global reach. As of 2019, the company had 5,641 employees and a revenue turnover of $433 million.
Natuzzi is the biggest furniture company in Italy. But on the global stage, it plays second fiddle to IKEA. Its revenue is only a fraction of what IKEA made in 2019. The major difference between Natuzzi and IKEA is that the former produces already assembled furniture while IKEA products are more suited to DIY enthusiasts who want to assemble their own furniture. It also makes a suitable alternative to IKEA for buyers looking to purchase a luxury brand.
Together, the IKEA alternatives had a total of 292,934 employees. Their combined revenue for 2019 was $29.88 billion. As the biggest furniture manufacturer in the world, Ashley Furniture is IKEA’s biggest alternative in the furniture sector despite its revenue turnover of $5.7 billion. The company has 31,000 employees. The American company is headquartered in Arcadia, Wisconsin.
|Zara Home||2003||A Coruña, Spain||152,854|
|Ashley Furniture Industries||1945||Arcadia, Wisconsin||31,000|
|American Woodmark||1980||Winchester, Virginia||10,000|
|Cost Plus World Market||1958||Alameda, California||6,127|
|Urban Outfitters||1970||Philadelphia, Pennsylvania||24,000|
|Pier 1 Imports||1962||Fort Worth, Texas||18,000|
|Williams-Sonoma||1983||San Francisco, California||28,200|
|Natuzzi||1959||Santeramo in Colle, Italy||5,641|