by Ashley also sells off Spanaway distribution facility for more than $200 million
For this week’s column, we go to the foreign news desk to take a peek at some companies grabbing headlines around the world. We begin in Australia, where Kmart is testing a home store concept that looks a lot like Ikea’s big boxes.
Yahoo reported a “first look” inside Kmart’s new K Home store format, which is scheduled to make its debut Thursday in Melbourne. The report describes a 41,000-square-foot space offering budget-friendly furniture, homewares, storage and accessories.
The K Home prototype features fully accessorized room vignettes on elevated platforms punctuating what otherwise looks pretty much like a warehouse. In other words, it looks a lot like Ikea. The only major departure from Ikea’s layouts seems to be the absence of a suggested route through the store.
“The space has been designed differently from a traditional Kmart store, with a more immersive home environment, curated displays and room-based inspiration to help customers explore the range in a more intuitive way,” said Kmart’s chief commercial officer, Callum Smith.
According to Smith, the Melbourne store is very much a test, a prototype. What happens next will depend on how the Melbourne store fares and what the company can learn from its customers and their reported experiences.
Surprised Kmart is still around? It’s big Down Under. A subsidiary of Wesfarmers, Australia’s Kmart Group comprises Kmart and Target and operates 449 stores throughout Australia and New Zealand. The group employs around 50,000, according to Kmart Group’s corporate website.
The new grocery store-size format is a way for the retailer to more meaningfully trade in home furnishings. As was the case for the U.S. version, the standard Aussie Kmart stores sell some furniture, but space restrictions mean most of this business is in smaller items.
“We want to make a customer journey quite inspiring,” Mark Slatton, head of Kmart’s store design, told The Australian newspaper. But, “we don’t want to move too far away (from how) our shoppers are used to shopping in a Kmart store.”
A video tour of the new format is offered by Kmart Group’s parent company, Wesfarmers.
Store format innovation is listed as one of the five priorities for the Kmart division this year, according to an extensive strategy briefing report released last week. Other priorities include digital acceleration and supply chain transformation.
The competition
Kmart Australia has its work cut out for it, as a recent “frenzy” set off by Ikea’s new PS Collection more than suggests.
According to a separate report from Yahoo, lines of customers formed outside Ikea locations in Australia before sunrise in anticipation of the new homewares collection launching on June 4. Store staff had to deploy a wristband system to manage the lines, and limits were established to prevent hoarding.
“We knew there was excitement around the PS 2026 collection, but the speed at which these pieces have been snapped up by customers today has taken us by surprise,” Ainslie Woodham, Ikea Australia and New Zealand home furnishing and retail design manager, told Yahoo.
Ikea has 10 stores throughout Australia. The collection goes on sale online on June 18.
The new collection has everything Ikea customers expect, which is a compelling blend of fun, functionality, flair, innovation and affordability. For example, a funky red periscope-like clock is $60 Australian, or US$42. Wall decorations run only $5 Australian.
The lamps sold out first, according to Yahoo, with some of the chairs disappearing right behind them.
One of the designers of the new collection, Lex Pott, told Yahoo that movement is an important element throughout PS 2026, movement that helps the collection’s pieces come alive.
“When something is only playful, it risks becoming a gimmick,” he said, describing the balance he and his team were striving to achieve. “And when it’s only functional, it can lack joy.”
For more on PS 2026, Ikea’s website has plenty.
Different continent, same story
We drop in on Toronto’s retail scene to find that yet another storefront has darkened. Urban Barn on Queen Street West ended its 25-year run last month, with the chain quietly removing the downtown location from its website.
Urban Barn launched in Vancouver in 1990, since expanding to 54 locations across Canada.
Trading at mostly medium price points, Urban Barn is owned by the Stern Group and sources its upholstery domestically, according to the Urban Barn website.
Amazon gets Ashley distribution complex
We return to the domestic news desk for two last items, both of them concerning Ashley Furniture.
The Tacoma News has reported that Amazon acquired Ashley’s 1.1-million-square-foot distribution facility and complex in Spanaway, Washington, for more than $200 million, a price that set a record for Pierce County. Located just south of Tacoma, the mega complex is in Amazon’s backyard and will, therefore, help the e-commerce giant streamline logistics in the Pacific Northwest and elsewhere.
Ashley is calling the sale a “strategic realignment,” but did not go into detail on the implications of that realignment. One factor could be the high demand for industrial space in the Pacific Northwest.
In addition to the complex, Amazon acquired 20-plus acres of undeveloped land from Ashley in a separate deal worth about $22 million.
Opening in 2022, Spanaway was Ashley’s first distribution center on the West Coast and ninth overall. The development was part of a $1.5 billion investment in operations in a span of 18 months, according to Todd Wanek, president and CEO, speaking about Spanaway in 2022.
According to the Tacoma News, Ashley acquired the 38-acre plot for $12.1 million in 2019, land just west of its earlier $8.5 million acquisition of about 40 acres in 2018. The first phase opened in 2022, with a second phase expanding the center to 1.1 million square feet just a year later.
About the same time as the deal with Amazon, Ashley and direct-to-consumer bedding resource Resident Home agreed to a $9 million to $12 million class action settlement over mattresses sold between Oct. 1, 2017, and June 30, 2024.
The suit, Todd v. Ashley Furniture, alleged that the mattresses contained fiberglass as a fire-retardant material, an element that could escape and cause harm to consumers, and that Ashley and Resident Home did not adequately warn consumers about the risks associated with the materials.
The companies agreed to the settlement to resolve the lawsuit and its claims “without admitting any wrongdoing,” according to court records. The settlement intends to offer compensation to affected customers and mitigate the potential costs of ongoing litigation. As many as 6.2 million customers could be eligible to make a claim, according to the filings.
While Judge William M. Conley gave preliminary approval on March 19, a hearing on final approval is scheduled for Sept. 24. The case has been litigated for approximately five years, including extensive discovery, mattress testing by experts on both sides, and two rounds of mediation in fall 2025 and January.
If approved in September, the $12 million settlement fund would be divided in three ways. The largest slice of the pie, $9 million, would go to the roughly 6.2 million class members, though not as cash. Instead, eligible consumers who file claims would receive store vouchers, redeemable at Ashley Furniture stores. A second slice of up to $3 million would go to class counsel as attorneys’ fees and costs. Any difference between that request and what the court ultimately awards will be redistributed to class members. That leaves about $380,000 to cover administrative costs that the settlement has Ashley Furniture paying directly.
The named plaintiffs who filed the case will also receive service awards ranging from $1,316 to $5,000 each, for a total of $85,000.
The settlement’s preliminary approval was not without reservation. Judge Conley pointedly noted his “skepticism about the fairness of the proposed settlement in the form of vouchers to defendants’ companies, especially relative to a cash payout to class counsel,” the approval filing states.
The court-approved website for the Ashley mattress settlement can be found at https://mattressclassactionsettlement.com/.
