New store takes on Macy’s, Sephora

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A $449.99 bottle of Penfolds Grange at Walgreens new concept flagship at State and Randolph. Monday, January 9, 2012 | Brian Jackson~Sun-Times

Updated: February 11, 2012 8:18AM

A Chicago analyst said Monday he believes the new Walgreens store at 151 N. State is viable only for select locations such as Manhattan and downtown Chicago, and shows how Walgreen Co. needs to attract new sales outside of the pharmacy.

“[Walgreens] is throwing everything and the kitchen sink into this store, but it is open to interpretation whether people will want to buy sushi next to someone visiting a clinic because they have the flu,” said Matthew Coffina, an equity analyst who covers Walgreen Co. for Morningstar. In the Chicago store, the sushi bar is at the main entrance, while the pharmacy is upstairs on the second floor.

The Chicago store, featuring a sushi bar, nail bar, high-end cosmetics and far-flung fresh-food offerings, faces a slew of competition from nearby Macy’s, Ulta, Sephora and a Target store slated to open late this year at the former Carson Pirie Scott site, in addition to its traditional drugstore rivals. Yet, Walgreen needs to attract greater sales from non-pharmacy areas of its stores since it exited on Jan. 1 its $5.3 billion business with Express Scripts and faces other challenges involving prescription drug reimbursements, Coffina said.

Walgreen Co. said Monday about 125,000 customers have signed up for a January discount it is offering on its prescription savings club card.

Walgreen spokesman Michael Polzin said the Deerfield-based drugstore giant envisions opening “several dozen” of the flagship-style stores nationwide.