Furniture As Fashion -- Ikea's Take On Home Decor - Stylish Yet Inexpensive - Meets A Puget Sound Area Awash In Cash And Confidence

Forget for a moment that its sales jumped 39 percent this year to $46 million, or that it recently sold $565,000 worth of furniture and accessories in a single day, or that its 200,000-square-foot store in Renton makes a Costco warehouse seem small.

Inquiring minds want to know: What does Ikea stand for?

Bjorn Bayley, co-owner of the Scandinavian-style furniture franchise near Interstate 405 and Highway 167, explained:

Ingvar is the company founder's first name. Kamprad is his last. Elmtaryd is the farm in Sweden where he was born. Agunnaryd is the village where the farm is located.

From a small, mail-order business in 1943, when a 17-year-old Kamprad visited Swedish furniture makers and took pictures of their products to include in his fliers, Ikea has grown to a $6-billion-a-year chain with 136 company-owned and franchise stores in 28 countries.

Its Renton outlet, the only non-company-owned Ikea franchise in the United States, has the No. 1 market share among furniture shoppers in the Seattle area, with 18 percent, edging out The Bon Marche Home Store's 16 percent, JC Penney's 15 percent and Sears HomeLife's 13 percent, according to Scarborough Research, a New York-based demographics company.

"Ikea is shaking the shack big time," said J'Amy Owens, president of The Retail Group, a Seattle-based design and retail consulting company. "Ikea has shown American consumers they can have the style they want at the price they want."

With its inexpensive, Swedish-designed furnishings, Ikea is riding a home-improvement wave that has lifted the fortunes of other furniture stores as well.

The Puget Sound area's economy is booming, workers are pouring in, new homes are being built, people are remodeling and expanding their homes. "Home sales always help furniture sales. I think people feel good about the future and they are thinking, hey, now is a good time to purchase," said Roy Swedstedt, divisional manager for Dania Furniture Collections in Tukwila.

"Home furnishing is a really hot category," added Susan Zimmerman, a retail specialist with CB Commercial Real Estate Group in Seattle. People are tending to nest more, she said. Or as Owens put it, "We're tired at the end of the day. We go home and stay there."

That people are spending more time with their families or entertaining at home is translating into sales at the cash register.

Masins Furniture, with stores in Seattle and Bellevue, reports a 20 percent increase in sales this year over last. Schoenfeld Interiors in Bellevue is seeing a 47 percent jump in sales this year.

Even companies that had to retrench a couple of years ago because of the squeeze on consumers' dollars by everything from electronics stores to video rental outlets are rebounding.

"I think the major reason is a change in the economy. When people's confidence level is high, they will spend money on home furnishings," said Ken Greenbaum, president of Greenbaum Home Furnishings. The 38-year-old family-owned business closed its stores in Lynnwood, Tukwila and Tacoma in 1995, but its flagship in Bellevue is enjoying double-digit sales increases this year, said Greenbaum.

The blossoming home-furnishings segment has spawned a number of new competitors in the Seattle area, from Z Gallerie and Pottery Barn to Restoration Hardware and Soho, a Bellevue furniture store.

But other longtime retailers have closed, such as Seattle's upscale Abodio chain, or remain in financial straits. Levitz, formerly the nation's No. 1 furniture chain with three stores in the Seattle area, is in Chapter 11 bankruptcy protection.

If, as CB Commercial's Zimmerman said, retail "always needs to be fresh, new, hot," Ikea appears to be leading the charge in generating shopper interest these days.

Walk into the Ikea in Renton and it is like entering a one-stop home-shopping center. The store is massive - 200,000 square feet of showroom space and another 200,000 square feet of covered parking. Merchandise is laid out so that customers wind along a path that progressively takes them from living room to dining room to kitchen and then office and children's furniture display sections. Rugs, lighting products, cookware and other accessories fill out the cavernous former Boeing parts warehouse.

Bayley and some other furniture industry observers say buying habits have changed. People are more apt to purchase furniture they're willing to change over the years than expensive heirloom pieces.

The store stocks 9,000 different items, said Anders Berglund, the other Ikea co-owner.

"It is definitely more a fashion industry than it was in my parents' day," said Bayley. "There you bought your furniture and it lasted through your whole life." Today, he said, "People's tastes change all the time."

Ikea's furniture is designed in Sweden but manufactured all over the world in an effort to keep costs down, said Bayley and Berglund. The top of a table might be made in one country, its legs in another, if that will cut production costs, they said.

Unlike more-expensive furniture stores that custom-make and deliver their pieces to a customer's home, most of Ikea's customers do the delivery and assembly themselves.

The Renton Ikea opened Oct. 20, 1994. In its first 10 months of business, it racked up $28 million in sales. In its first full fiscal year ended Aug. 31, 1996, it garnered $33 million. For the most recent year ended Aug. 31, its sales jumped 39 percent to $46 million. Its sales are currently running 40 percent above the same period last year, said Bayley, who added that Ikea's worldwide reputation and the Seattle area's large Scandinavian population helped spark sales.

While the privately held franchise does not disclose its profits, it recently shared its bounty with employees in a public way.

Rather than handing out the typical company bonuses this year, Bayley and Berglund announced they would split all the proceeds from the store's Oct. 4 sales with their 266 full- and part-time workers.

With some advance advertising and a big customer response, Ikea hauled in a record $565,000 in sales that Saturday. Bonuses ranged from $80 for the newest employee to more than $7,000 for those who had been with Ikea from the start.

Bayley and Berglund worked for Ikea in Scandinavia and Canada before setting up their franchise here.

"Seattle is a kind of experiment, maybe to give a little competition to the existing Ikea Group stores and to see if we can run a store maybe more effectively or more profitably," Bayley said. There are 11 company-owned stores in the United States, the closest to Seattle being in Los Angeles. There also is an Ikea Group-owned store in Vancouver, B.C.

Ikea has an unusual structure. Kamprad, the founder, gave the company's retail, purchasing and product-design operations to a charitable foundation he set up for the purpose of providing grants to architects, environmentalists, historic preservationists and others working to create a better life for people, said Bayley.

The Stichting Ingka Foundation, based in The Netherlands, established an operating arm, the Ikea Group, to run the company-owned stores, mainly in Europe, the United States and Canada.

The Kamprad family retained the rights to the Ikea trademark, logos and retailing concept. It gives out the franchises, usually in countries the Ikea Group is not likely to go into soon, such as Kuwait, Singapore and Saudi Arabia. But now it has authorized the franchise here.

The Renton franchise appears to be making the most of the opportunity, drawing from Oregon, Alaska, Idaho and Eastern Washington, as well as the Puget Sound region.

"If you are driving from Portland, you are not coming here to buy a bag of tea lights. You might even be coming with a U-Haul or something. I think that helps push the ticket," said Bayley.

But while some furniture-industry officials credit Ikea for setting trends in inexpensive, quality furniture, they said many buyers still want higher-end pieces.

"We have always been of the belief that you spend a little more and get a better product that will last," said Bob Masin, president of Masins Furniture. A customer may have to wait longer for a custom-made piece of furniture, but it will be made to his or her specifications and will be of lasting quality and style, Masin said.

However, Ikea and stores such as his share a similarity, Masin said. They are unique in their own ways.

"A lot of stores try to be everything to everybody. I think to be successful, you have to know who your customer is and you have to stay focused on your product and really do whatever you can to take care of your customers," he said.

Lee Moriwaki's phone message number is 206-464-2320. His e-mail address is: lmor-new@seatimes.com