By  on April 1, 1994

NEW YORK -- With one bold move, Woolworth Corp.'s Rx Place Drug Marts has become Manhattan's third-largest drugstore chain.

On Tuesday, 10 new Drug Marts were opened in former Woolworth general merchandise units.

Sizes of the units range from 6,000 square feet to 10,000 square feet, with a merchandise mix that includes cosmetics, health and beauty care, snack foods and prescription drugs.

Duane Reade remains the market leader in Manhattan, with 41 units, while Love's Stores has 24.

With cosmetics expected to account for some 7 percent of overall volume in the Drug Marts, the chain has also become a formidable power for beauty sales.

Executives at the New York-based Woolworth's declined to discuss specific sales figures, but industry sources estimate the Drug Marts will have a beauty volume similar to that of a typical deep-discount drug store, or $500,000 to $700,000 per store annually.

The Drug Mart expansion reflects a new attitude at Woolworth's, where drugstore retailing has been found to be more lucrative than traditional general merchandising with its lower gross margins.

The move to drugstores began late last year, when the company transformed five metropolitan-area Woolworth units to Drug Marts. With the Manhattan stores, the total has now been increased to 15.

Edgar Swain, president of Woolworth's F.W. Woolworth Co. subsidiary, said the company expects to open another 10 Drug Marts in the New York area this fall.

In addition, he said he hopes to expand into the entire Northeast region, with 70 to 80 potential sites from Virginia to Maine.

These more suburban locations, however, will probably be served by the chain's The Rx Place prototype, instead of the pared-down Drug Mart, which is more suited to urban locales.

Along with the expansion of the Drug Mart chain has come a new emphasis on beauty, with three of the new units housing dramatically remodeled cosmetics departments.

Instead of locating beauty in the center of the store, as is the case in the first Drug Marts, cosmetics has been placed along a wall near the front of the store.

Doing so gives a more open feel to the department, according to executives, who claimed this makes it easier to shop.

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