Smith to launch drive into So. Calif. by early 1992 - Smith's Food and Drug Centers plans 60 stores for Southern California

Smith to launch drive into So. Calif. by early 1992

SALT LAKE CITY -- Smith Management, the chain of 96 combination stores, will spearhead a drive into Southern California by early 1992, Jeff Smith, chairman and ceo told Drug Store News.

The highly regarded operator plans to open 60 Smith's Food & Drug Centers with pharmacies by 1995--a two-thirds expansion in its size--led by a 79,000-square-foot unit due to bow in Riverside County late next year.

This expansion would follow 15 combo openings in 1990. The westernmost stores would be serviced by a $70 million distribution center on which Smith will break ground in Phoenix later this year. Smith operates stores in Arizona, Colorado, Idaho, Nevada, New Mexico, Texas and Wyoming.

"We feel the southern California area is a good opportunity for us," Smith said. "We've filled up our current marketing areas and felt that this new area provided the best opportunity for us to expand."

Although Smith had pulled out of Southern California in 1984 when it sold stores to Lucky, the chain feels its newer, "super" combo units will mesh well in the developing competitive arena there. "It was our decision in those days [1984] to rebuild and upgrade our units to larger, super combo formats," said executive vp Bob Bolinder. "Our southern California stores at that time were the smaller, more conventional stores and didn't fit our development plans."

Retailing analyst Jonathan Ziegler of Sutro & Co. feels the market is ripe for Smith's expansion. "The area, in my opinion, is understored now, and there are more than enough consumers to handle their expansion," he said. "Their stores are very impressive and they have big, powerful categories, especially in HBA."

In addition, the company is expanding into areas of great population growth, Ziegler said. "They're not moving into L.A. county--they're going northeast and east, which is where the population is growing."

Funds for the ambitious expansion will be internally generated, said Bolinder, stating "we're in good financial shape. Since we went public last year, we've had a fine capitalized balance sheet. With real estate financing and internal funds, we should have ample funds for the expansion."

PHOTO : Smith's plans to open 60 Smith's Food & Drug Centers with pharmacies by 1995.

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