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A New Heavyweight Lands in Manhattan

NEW YORK -- With one bold move, Woolworth Corp.'s Rx Place Drug Marts has become Manhattan's third-largest drugstore chain.<BR><BR>On Tuesday, 10 new Drug Marts were opened in former Woolworth general merchandise units.<BR><BR>Sizes of the units range...

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.

Space allocated for pegged cosmetics — including Maybelline, Cover Girl, Revlon and L’Oreal — has been also been expanded by an estimated 25 percent.

Prestige fragrances have been so successful in the first five units, executives noted, that the category space in the new stores has been doubled from a four-foot glass case to an eight-foot model.

According to cosmetics buyer Gina Russo, Drug Marts incorporate many of the most successful strategies learned at Woolworth’s larger Rx Place stores.

“We try to duplicate the mix on a smaller scale as well as cater to the needs of neighborhoods,” she said.

Houbigant’s Rafinee is the latest fragrance to be taken from limited distribution to the mass market.

Although Rafinee has been available on a direct basis to J.C. Penney, it has primarily been secured via secondary sources in drug and discount stores, according to Gene Folkers, vice president marketing for Houbigant, which is based in Ridgefield, N.J.

Houbigant said it will resize and lower the price on the scent to be in line with mass market tags. The firm’s mass market division, Parfums Parquet, will handle the brand.

Launched in 1982, Rafinee has estimated sales of $10 million. The original 0.5-oz. eau de toilette carried a suggested retail of $25. For the mass market, Rafinee has been pared down to a 0.37-oz. spray mist with a retail tag of $11.

Also available will be a 1-oz. version retailing for $17 and a 2-oz. version at $22.50. Folkers said he hopes mass market exposure will also entice younger users.

“We expect to reach a customer who likes elegance, but doesn’t have the pocketbook,” he said, adding that Parfums Parquet hopes the brand will be merchandised near its other lines, including Chantilly and Lutece.

Retailers said they welcome the opportunity to secure more fragrances on a direct basis, because that way they can secure greater gross margins and participate in promotional programs.

“The fragrance category needs more new things to wake it up,” concluded Sheri Ralston, buyer for PayLess in Wilsonville, Ore.