WAL-MART TO LAUNCH FIRST STORE WITHIN LOS ANGELES CITY LIMITS

Byline: Teena Hammond

LOS ANGELES — Wal-Mart will mark its entry into the Los Angeles city limits with a 135,000-square-foot, two-story store — the company’s first two-level unit in the U.S.
It will open late this year or early in 1998 in a former Broadway store in Panorama City, a suburb of Los Angeles.
Wal-Mart purchased the 200,000-square-foot building from Federated Department Stores about two months ago.
The store, part of a 370,000-square-foot mall, is in a predominantly Hispanic neighborhood. Wal-Mart will target its merchandise mix to appeal to this audience, a spokesman said, adding that it is too early to discuss what the store will offer.
Wal-Mart is considering opening other stores within Los Angeles, but has no firm plans, the spokesman said.
As reported, the Bentonville, Ark.-based retailer has been planning to increase its presence in metropolitan areas such as Los Angeles, where it already has 25 locations outside of the city limits.
Wal-Mart opted for the multilevel store because of the dearth of vacant land in the area, the spokesman said. Wal-Mart typically constructs new buildings for its stores, although the company does have some locations that were previously inhabited by other tenants. “This is an example of where Wal-Mart looked at the market, location and customer base and made it happen,” despite a lack of vacant land to build a new building, the spokesman said.
Joseph Ronning, a retail analyst at Brown Bros. Harriman, said retailers often have to settle for an existing building to get into an established area such as Los Angeles. Wal-Mart operates three two-story locations outside the U.S. One is in Toronto and two are in China, the spokesman said.
Wal-Mart has been scouting for space in Los Angeles for several months, said Jack Kyser, chief economist, Los Angeles Economic Development Corp.
“For Wal-Mart, this is going to be a very, very profitable market,” Kyser said.
The costs of operating a two-story store are higher than for a one-level site, but the increased volume that will come from moving into a densely populated area such as Panorama City “will more than make up for the additional cost,” Ronning said.

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