WHAT'S IN STORE? KOHL'S, THE MIDWEST-BASED DISCOUNT CHAIN, JUMPS INTO THE REGION; RIVALS HAVE TAKEN NOTICE, CUSTOMERS ARE NEXT.

Byline: Barbara Correa Staff Writer

A major department store chain invades the Southern California market this week with an unprecedented simultaneous opening of 28 stores across the region that could shake up retail merchandising.

This Friday, Kohl's, a Midwest discount-department store chain that is something of a cross between Target and Macy's, opens seven stores in Los Angeles County, three in Ventura County, five each in San Bernardino and Riverside counties and eight more in Orange County.

The chain also recently opened a 650,000-square-foot distribution center at San Bernardino International Airport to service its new stores.

``They come in with a bang and say, `Wham-o! we're here','' said Britt Beemer, chairman of the consumer research firm America's Research Group, who says Kohl's take-no-prisoners strategy has never failed the company.

``Clearly the department stores, Mervyn's, T.J Maxx, Marshall's, Ross and Wal-Mart and Target are going to be impacted. They go head-to-head with those stores.''

In contrast to Kohl's strategy, Wal-Mart arrived in Southern California in 1990 with two stores, one in El Centro, the other in Lancaster. It then built up slowly, adding stores in the Inland Empire and later in Los Angeles County. Wal-Mart is still planning further expansion in the region.

The other big regional retail incursion analysts point to was Nordstrom, which arrived in the area in the late 1970s. But like Wal-Mart, Nordstrom grew very gradually and still has fewer than 20 department stores in Southern California.

There's nothing gradual about the Kohl's invasion - the Friday rollout is the company's biggest ever.

Kohl's is big on brand names - 80 percent of all its stock is national brand names, said Julie Gardner, Kohl's senior vice president of marketing and one of the brains behind the TV ads Southern Californians have been inundated with since January. That same percentage of Kohl's merchandise falls under the apparel category; the rest are home products.

At about 80,000 square feet, the stores are smaller than a traditional department store. They are usually built on a single floor and emphasize easy maneuverability, with a 10-foot-wide circular aisle running throughout, front checkout and shopping carts with seats for kids.

Despite some recent signs of cooling (Kohl's in January lowered expectations for fiscal fourth quarter sales) the brand-driven department store chain has continued to outperform competitors in terms of sales figures.

Still, Kohl's is aggressive toward its competitors. In the Fallbrook Center in West Hills, it's opening a store right next door to Mervyn's, which is already competing for customers with nearby Old Navy and Target stores.

In appearance, Kohl's has a lot in common with a Robinson's-May or a Mervyn's.

A sneak peak of the West Hills store last week revealed brightly lighted, well-stocked aisles of Liz Claiborne Axcess, Mudd, and Croft & Barrow spring clothes that might be priced a bit above expectations.

``I would be shocked if they're not highly successful,'' said Aubie Goldenberg, a retail analyst at Ernst & Young's Los Angeles office. ``It will be growth at the expense of other retailers.''

The launch is not without risks.

``California is not the Midwest. We're not Colorado. And the one thing some retailers struggle with is not tailoring their products to California,'' he said.

The store has plenty of California-centric items, like tropical-drink Hawaiian shirts for men, Lakers gear, small bags beaded with scenes of Rodeo Drive and racks of Ocean Pacific sunglasses.

And in a further bid to persuade California customers that it understands their particular needs, Kohl's plans to raffle off a BMW convertible and several other cars as part of the grand-opening festivities.

Mervyn's isn't planning to take the competition lying down.

``We know California better than anyone else,'' said Greg Terk, corporate spokesman for the Hayward-based chain. ``We started in California.''

Terk said Mervyn's annual extreme sports tournament, which features some of its own brands of bathing suits, shorts, sunglasses and cargo pants, shows how the store is tuned in to what Californians want to buy.

Still, Kohl's so far seems to have set off quite a buzz among shoppers.

``I was just talking to a group of friends about it,'' said Mervyn's shopper Karen Sensibile of West Hills, a young mother who falls directly into Kohl's target demographic. ``We're excited ... and we're curious. These other stores are probably going to see some competition.''

And not just for customers.

``I'm well aware of how it might affect recruitment because (Kohl's) will be actively recruiting management from our stores,'' said Allison Peck, store team leader at a Target in Van Nuys. ``We've talked to our executives about it, and we're making sure we're keeping them happy.''

Higher-end department stores are also bracing for changes in the competitive landscape.

Ira Kalish, chief economist at the Los Angeles office of Retail Forward, a retail market research firm, said, ``I know Federated, which owns Bloomingdales and Macy's, has looked at putting in centralized checkouts and offering shopping carts, things you don't normally find at a mall-based department store.''

Federated announced last September it was introducing shopping carts in some Southern California stores, a move some analysts say is a tactical defense to keep customers from defecting to Kohl's.

Aside from carts and centralized checkouts, Kohl's is banking on Southern California shoppers' lack of patience with mall parking structures and convoluted entrances.

Kohl's typically builds its stores in larger strip malls and puts a premium on having four-sided access with parking, said Jack Kyser, chief economist at the Los Angeles Economic Development Corp., who's analyzed Kohl's and its impact on the local economy.

``Consumers aren't too happy with the time it takes to get in and out of a mall,'' said Kalish.

The Kohl's arrival is great news for consumers and communities that are getting a store in their area.

The 28 stores together are hiring at least 4,200 workers from Redlands to Ventura. That figure includes several hundred workers at the company's distribution center at San Bernardino International Airport. Hillwood Investments, the project's developer, has said the warehouse complex on the site of the former Norton Air Force Base will eventually employ 1,000 people.

The economic impact will be greatest for cities like La Verne, where a new Kohl's store will replace an abandoned Kmart, which was among the top three producers of sales tax receipts for the city. The top is a Ford dealership.

``We hope to get a couple hundred thousand a year from (Kohl's),'' said Ron Clark, finance officer for the city of La Verne.

That's based on the city's share of 1 percent of sales tax for annual sales of $20 million, which Clark said would jibe with other similar stores nearby. The city's annual budget is about $16 million.

Of course, the influx won't be so good for adjacent communities that could lose shoppers to the new stores.

Kohl's arrival will likely shake up the industry and pressure other retailers to think about weeding out poorly performing stores. It should also help to force retail out of the homogenous trend it's been taking for the past five years or so.

``Retail right now is at a strange pass,'' said economist Kyser. ``There are two major challenges. There's the sameness of the products, and then there's the housekeeping issue.''

Southern California transplants familiar with the store were upbeat about its Western expansion.

``We shop at them in Philadelphia,'' said Larry Ruckman of Chino. ``It's a very nice store. They have everything (J.C.) Penney's would have but a little nicer store.''

Added Billie Thayer of Corona: ``It's great. It's like Costco without the food.''

CAPTION(S):

4 photos, map

Photo:

(1 -- 4 -- color) Kohl's is opening 28 stores in Southern California. Among the wares for sale are home accessories like the candles at right, as well as men's and women's clothing. Armando Vasquez, above, shrink-wraps items while boxes travel on a conveyer belt at Kohl's 650,000 square-foot distrbibution center in San Bernardino.

Tom Mendoza/Staff Photographer

Rodrigo Pena/Staff Photographer

Map:

KOHL'S STORE LOCATIONS

SOURCE: Kohl's Corp.