The Store That Runs on a Wrench

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At a cavernous store in the Washington suburb of Dale City, Va., thousands of shoppers lined up last week with box-laden carts at a battery of check-out counters. A supermarket perhaps? Or a Toys "R" Us store? No, these bargain hunters were buying furniture. The boxes of all shapes and sizes contained build-it-yourself kits for assembling everything from chairs to cabinets. It may seem an odd way to furnish a house, but not to the throngs of customers who were grabbing, hauling and finally staggering out of the store.

The commotion was stirred by the annual sale taking place at the two new American outlets of IKEA, the Scandinavian retailer of unassembled furniture and other household goods. While most Americans have never heard of IKEA, the chain had $1.7 billion in sales last year at 76 stores that stretch from Norway to Australia. Already one of the fastest-growing merchants in Europe, where 51 of its stores are located, IKEA is now successfully bringing its pizzazz and promotion to the U.S. The company put a store in suburban Philadelphia two years ago and followed with the Dale City outlet in 1986. A third branch is scheduled to open in 1988 near Baltimore.

What sets IKEA apart is that much of its merchandise is sold apart. Buyers must assemble the kits at home, using sparsely worded drawings, a screwdriver and a little hexagonal allen wrench that IKEA supplies to install the special bolts in its furniture. IKEA gets promotional mileage even from the wrench: it appears everywhere in the store, talking in cartoon balloons and giving advice about such things as the store's return policy and its delivery service. The allure of the unassembled products is that they sell for at least 30% less than finished furniture of comparable quality. Customers do not seem to mind putting their bargains together. In its first 15 months of business, the Dale City IKEA has assembled some $40 million in sales.

Last week everyone from Virginia and Maryland housewives to Capitol Hill secretaries and foreign diplomats were streaming to Dale City to take advantage of discounts of up to 70% off IKEA's regular low prices. A sofa that normally goes for $195 was $95, while $69 dining-room chairs were marked down to $49. The 3.5 million people in the Washington area could hardly miss the 330 radio and TV commercials touting the sale -- or the double-page ad in the Washington Post. City buses winked with the company's cryptogram: an eye and a key followed by "ah!" The hoopla brought out 10,000 shoppers on the first day of the sale.

The IKEA experience is instant gratification cloaked in cleverness. Upon entering a store, parents can deposit children in what IKEA calls a ballroom, essentially a giant box filled with thousands of brightly colored balls that becomes a delightfully diverting wallowing ground. Supplied by the store with a 196-page catalog, note pad, pencil and measuring tape, shoppers then stroll through seductively decorated settings of furniture from 1,500 worldwide suppliers. Office chairs? IKEA has 14 designs. Lamps? There are versions that stand and hang and squat, each labeled in English, Danish, German, French and Swedish. The displays include kitchen tables from Rumania, nightstands from Italy, bookshelves from West Germany, desks from Yugoslavia and mattresses (no assembly needed) from Canada.

Sometimes, though, shoppers are dismayed by SORRY OVERSOLD tags on popular pieces. Though some frustrated customers think IKEA is always out of all the goodies they want, the actual total hovers at 200 to 300 of 13,000 items. To keep prices down, IKEA buys a whole year's supply of goods in advance for all its stores throughout the world, then bets that its projections are right.

An average of 400 Dale City customers a day dine on Swedish food in IKEA's strategically located restaurant, just off the showroom floor. Most-asked-for dish: Swedish meatballs. Says Micha Baur, the West German who is the store's manager: "Very often people make their buying decisions in our restaurant. You can overhear them. 'Should we buy this table or that table? What do you think, honey?' " After making the choice, shoppers proceed to the self- service warehouse, where they find the goods on neat rows of shelves.

IKEA is run by missionaries who were charged up by Ingvar Kamprad, 61, a Swede who started the company when he was only 17. He synthesized the name IKEA from his initials and those of Elmtaryd, his family's farm, and Agunnaryd, the community where he grew up and where he began the business some 40 years ago by selling ball-point pens through the mail. IKEA's management is still youthful, light on titles and neckties and thoroughly gung ho. The spirit is whipped up in seminars for employees on "the IKEA way." One thing stressed in the sessions: everyone has a right to make mistakes, so long as they learn from them.

After making such a promising start in the U.S., IKEA is hoping to expand across the country. Says an excited Bjorn Bayley, president of IKEA's North American operations: "What will really be fun is when we get to places like Minnesota. They still speak Swedish there."