NEW YORK — Sephora is going back to the old neighborhood.

This story first appeared in the January 27, 2004 issue of WWD. Subscribe Today.

The French cosmetics chain closed its Rockefeller Center flagship in August 2002 and is now poised to return.

Sephora, a division of LVMH Moët Hennessy Louis Vuitton, is said to be taking over the Benetton flagship at 597 Fifth Avenue. The distinctive space between 48th and 49th Streets was at one time a Scribner’s bookstore.

There have been rumors about Benetton’s exit from Fifth Avenue for some time. In 2002, Benetton posted its first-ever full-year loss. Last year, the competitive landscape got even more crowded as Hennes & Mauritz arrived in Italy, Benetton’s home turf.

A Benetton spokeswoman had no comment.

When Sephora closed its 21,000-square-foot flagship at 611 Fifth Avenue, the company said it was part of a strategy to focus on smaller, more productive formats. At its large multilevel stores, Sephora found that customers were loathe to venture beyond the main floor. It was replaced in that space by Façonnable.

The new Sephora store will have about 4,000 square feet on the ground floor with a mezzanine on the second level. Sources close to the company said a lease should be signed within days.

A Sephora spokeswoman said the company “is always looking for opportunities,” but declined to comment on the specific site. Madison HGCD, which represents Sephora in real estate transactions, declined to comment.

The neighborhood is changing. An American Girl Place opened at 609 Fifth Avenue near 49th Street, while Osh Kosh B’Gosh at 586 Fifth Avenue is being marketed by brokers. Even some of the stores with perpetual “Going Out of Business” sales are turning over.