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Stor Settles With Ikea; Agreement Calls for Some Changes, No Payments

June 20, 1989|MARTHA GROVES | Times Staff Writer

Stor, the upstart retailer that brought the idea of selling low-cost, ready-to-assemble European furniture designs to Southern California, has settled its differences with a Swedish merchant that accused it of stealing ideas.

In a significant victory, Stor will not make any payments to Ikea, and the two sides will pay their own legal fees. Ikea, which claimed that Stor had engaged in unfair competition and copyright and trademark infringement, had sought damages and, possibly, some of Stor's profits.

Under the settlement, Stor agreed to some relatively minor changes in its operation. Among other things, it will modify its store layouts, not call its products by certain Scandinavian names or words and not use certain advertising layouts and typefaces in its catalogues that too closely resemble those in Ikea's catalogues.

It also has agreed not to display the flags of Scandinavian countries or to use yellow or blue on the outsides of any stores. An exception is the third and newest Stor, opening this week in the former Ohrbach's in Torrance's Del Amo Fashion Center, where the entire facade consists of deep blue enamel tile that Stor contended could not be changed except at great cost.

The settlement is expected to be presented today to U.S. District Judge Harry L. Hupp in Los Angeles.

In an interview Monday at the Torrance store, James D. Stadtlander, Stor's president and chief operating officer, said of the settlement: "We're obviously very happy. We want to put our efforts into building the company."

A lawyer for Ikea said the company is satisfied with the settlement.

Stor is owned by International Furniture & Accessories Mart, a closely held company backed by venture capitalists. In 1987, Stor opened its first outlet in the City of Industry, where the company is based. A second store, in Tustin, was opened last year.

Stadtlander, a 30-year retailing veteran who formerly worked for Montgomery Ward and W. R. Grace, said Ikea was only one of many specialty home-furnishing retailers that Stor executives visited in the United States and Europe as they developed their concept. Others included Conran's, which recently opened a store in the Beverly Center in Los Angeles, and Crate & Barrel.

Even so, retail observers immediately recognized much of Ikea in Stor.

"Stor began as a second-rate imitator of Ikea, and very consciously so," said Neil Stern of McMillan Doolittle, a retail consulting firm in Chicago. "But in the time that they've been open, they have learned their own business . . . and have learned the Los Angeles customer and are responding to that customer very effectively."

Ikea, which pioneered its concept in Europe, last year had $2.6 billion in sales. It operates 80 outlets, including stores in Philadelphia; Dale City, Va., near Washington, and Baltimore. Critics have faulted the retailer for a snail's-pace expansion in this country.

After maintaining for years that it had no plans to open any West Coast stores, Ikea has started "building an organization to handle the California area," Pamela Diaconis, a spokeswoman, said Monday. "It looks as if we'll start in Southern California."

By the time Ikea gets to Southern California, however, Stor will have established itself even more firmly in the minds of Southern California shoppers, Stern said.

Stor has "gone through their learning curve and will have completed it by the time Ikea is in the market," he added. "To the people of L.A., Ikea will look like a knockoff of Stor."

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