InFocus | Sweden
Making Haparanda hip
It's not just in Dubai that everyone checks out furniture giant Ikea.
- Gulf News Report
- Published: 00:11 June 6, 2008
- Image Credit: Gulf News Archive
It's not just in Dubai that everyone checks out furniture giant Ikea.
How do you turn around the fortunes of a struggling border town in Sweden's far north? Open a branch of Ikea. The furniture retailer's arrival in Haparanda has triggered a wave of investment, drastically reduced unemployment, doubled house prices and given the town a new sense of pride.
Up until the beginning of the 2000s young people were still drifting away from Haparanda — which sits against the border with Finland, 100 kilometres below the Arctic Circle — in search of a life elsewhere.
"The mood of the people was not bad, but levels of optimism were quite low," says Orjan Pekka, editor of the town's newspaper, Haparandabladet. "A lot of people running businesses probably just planned to run them until they retired and then close them down. So the view of the future wasn't really good."
But the announcement in June 2005 that Ikea planned to open a store in Haparanda was met with euphoria, and people literally celebrated in the streets.
"There had been rumors before, but no one really dared to believe it," says Pekka. "People realised what this would mean for their future."
Stamp of approval
Because it is so far north, Haparanda has always been seen by outsiders as being in the middle of nowhere. "In the past, when people from Haparanda tried to persuade business chains to establish here, the businesses have gone with the myth that hardly any people live in northern Sweden, so there is no point in investing," says Pekka.
But Ikea's decision was like a stamp of approval for the town; if Haparanda was good enough for the world's largest furniture retailer, it was good enough for anyone.
"Luckily [Ikea founder] Ingvar Kamprad was the first to believe that people would actually travel across the border when going shopping," says Pekka. "So instead of seeing the end of Sweden, he saw the gates to a four-country market in Haparanda."
Northern crossroads
The idea to approach Ikea came from Haparanda's mayor, Sven-Erik Bucht. He cornered Kamprad — said to be the world's fourth richest man — at a conference in Stockholm and spent 10 minutes giving him his sales pitch.
"I showed him the map, but from a different direction," says Bucht, who was named "Swede of the Year 2007" by the Swedish magazine Fokus for his drive to develop the region. "Not looking up from the south as maps normally show, but from the north.
"You could see that Haparanda-Tornio is at the heart of the Barents Region. It took a year, but then they realised this was an international place, a twin city in two countries, which would attract people from Sweden, Finland, Norway and north-west Russia, too."
Key to Bucht's pitch was the fact that one million potential customers live within a six-hour drive of Haparanda. While for many of us the thought of driving six hours to buy bookshelves and cutlery is a non-starter, it is quite acceptable to the people of the north. Before Ikea came to Haparanda there was a regular bus service from the town of Kiruna to the nearest Ikea store, in Sundsvall — 860 kilometres (534 miles) away.
Already expanding
With a population of only 10,300, getting Ikea to invest was a real triumph for the town; it is not the sort of place where the furniture giant usually builds its stores. Even when you add in its twin town Tornio, on the Finnish side of the border, you still only have about 33,000 people, and the Ikea board of directors — apart from Kamprad — was initially against the move.
But today the Haparanda store's parking lot is jam-packed with vehicles from all four countries. Indeed, the store has been such a hit that it has to be expanded to meet demand. The border between Sweden and Finland has been dissolving over recent decades, and the process was speeded up when the two nations became members of the EU in 1995, with Haparanda and Tornio slowly merging into one town. Today parents can choose to send their children to school on either side of the border; the fire and rescue services cooperate; the towns' district heating systems are connected; and their tourist offices have merged.
The "Ikea effect" on Haparanda was instant; within one week of the decision, the municipality had sold land to developers for more than 60 million crowns ($9.5 million, which is around Dh34.8 million). Now, two and a half years later, about 1 billion crowns (Dh0.6 billion) has been invested in Haparanda, and 150,000 square metres (1,600,000 square feet) of retail space has been built or is planned to be built. Unemployment is down from 12 per cent to 4.7 per cent, and house prices have doubled.
The town newspaper's editor says the opening of Ikea heralded "a new era" for Haparanda. "There's a different atmosphere in the town today," says Pekka. "If you had asked teenagers four or five years ago, they might have said that they were ashamed to be from Haparanda. Nowadays it's more hip."
- Courtesy: www.sweden.se, Sweden's official website
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