By  on April 5, 2007

Heavy customer use has taken a toll on the four-year-old Wal-Mart in Crenshaw, Calif., a suburb in Los Angeles' San Fernando Valley.

Graffiti is etched on a bathroom mirror, there are stains on rugs and dingy aisles remain crammed with merchandise.

About 20 miles north, a Wal-Mart in Panorama City, Calif., was remodeled in 2006. A fake wood laminate floor was put down in apparel, with a spacious grid of fixtures that hold coordinated outfits. Lower shelving enables customers to see across the store. New auto-flush toilets were installed.

Shopper Lupe Marrufo, who used to avoid the Panorama City store, said, "This is the first time I've gone into this one and thought, 'This is OK. Now everything looks pretty good.'"

In Gadsden, Ala., about 60 miles north of Birmingham, the remodeled electronics department lured customer Rachel Odom to splurge. "I didn't even come here to shop for a TV,'' she said. "But when they set the nice ones out on display, everything looked so much sharper...and I had to have it."

Wal-Mart, which built its reputation with low prices and never placed a premium on appearances, now believes clean, contemporary stores are required to woo middle-class shoppers and reinvigorate its lagging U.S. division.

The world's largest retailer generated $352 billion in revenue last year, and plans to slow the pace of expansion in the U.S., focusing instead on making existing stores more profitable. To achieve that goal, Wal-Mart needs better venues to display the apparel and home decor that it has been working to upgrade. During the past 10 months, the Bentonville, Ark.-based retailer has taken jackhammers and paint rollers to 1,300 stores across the U.S. as part of its biggest remodeling effort in corporate history.

What may be good for the long haul, however, has been painful in the short term.

Work resumed in January after an almost two-month hiatus for holiday selling. The retailer aims to complete partial or full remodels of 500 more stores, for a total of 1,800, by yearend. Disruptions from the projects hurt same-store sales in the third quarter and, by extension, the stock price. Wal-Mart posted its first comps decline in a decade, down 0.1 percent, in November.

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