Mervyn's ready to take on Kohl's

0 Comments | Oakland Tribune, Mar 15, 2003 | by Eve Mitchell, BUSINESS WRITER

Hayward-based Mervyn's has long been known as a retailer that provides a family friendly shopping experience in an environment positioned between a discounter and a traditional department store.

The same could be said for Wisconsin-based Kohl's, which opened 28 stores in Southern California last week. Although there are no immediate plans for stores in the Bay Area, fast-growing Kohl's eventually could have a retail presence here. Next year, Kohl's does plan to open stores in Fresno, Sacramento and San Diego.

About three weeks ago, Mervyn's began running humorous branding ads on TV in Southern California, ads that have since been seen in the Bay Area. The ads close with a Mervyn's shopping bag expanding with merchandise, much in the way a microwaved popcorn bag expands.

Greg Terk says the new ads are not a direct response to Kohl's presence in California. But the spots do amount to branding ads that will run in addition to ads that have been used to promote sales events, he said.

"This is a little bit of a departure," he said. "It's a branding strategy as opposed to a promotional strategy and we haven't done branding for some time. It's, 'Look how much stuff I can get into this bag,'" he said.

Terk said Mervyn's already is competing against Kohl's in at least five other markets nationwide.

Mervyn's was founded in 1949 when the first store opened in San Lorenzo. In 1978, the chain was bought by the company that owns Target Stores. Nationwide, Mervyn'shas 264 stores in 14 states. Almost half of the stores are in California. Kohl's is much bigger, operating 485 stores in 34 states.

Both chains focus on providing a place for mothers with children to shop for quality merchandise at value prices.

"The advantage we have is that we are part of the fabric of the history of California and have been around here for over five decades," said Terk.

Kohl's and Mervyn's strive to appeal to Hispanics, which U.S. Census says comprise the country's largest minority group. Overall, about 30 percent of Mervyn's customer base is Hispanic.

"One of the benefits of being in business in California so long is that we understand different minority groups and how we can provide them with different types of products," Terk said.

Connecting with the Hispanic community has long been part of Mervyn's marketing strategy, according to Lee Walker de Sarvide, vice president of marketing.

To that end -- a few days before Kohl's stores opened in California -- Mervyn's announced the hiring of Mexican soap-opera actress Indra Zuno as its Spanish-language fashion and home decor adviser.

According to a Target Corp. spokeswoman, when Kohl's stores have opened in direct proximity to a Mervyn's there are some comparable sales decreases in the first year. But after that sales figures return to a more normal trend.