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Kohl's, the Wisconsin-based department store that pushed into California six years ago, will have a mass grand opening Wednesday for 37 new stores, 30 of them in California.

The chain will open 35 of the stores in former Mervyn's locations, including three in the Sacramento area – which will now have nine Kohl's stores – and one in Lodi.

During an economic downturn, the mass opening is like a welcome downpour in a heat-baked desert.

"Seeing a store open could add to the idea that maybe we've seen the worst," said Suzanne O'Keefe, an associate professor of economics at California State University, Sacramento.

Kohl's, with its midrange price points, is an attractive option during hard times, O'Keefe said.

For the new stores, the company hired about 600 people locally, including for the Lodi store, said Nancy Martinez, a district manager for the company.

Among them are people who had worked for other large retailers that have closed recently, such as Mervyns, Gottschalks and Linens 'N Things, she said.

"We are so excited to expand these stores in California," she said.

The new stores opened on Sunday, but will offer specials for early risers at Wednesday's 7 a.m. grand opening, Martinez said.

Kohl's acquired the Mervyn's locations by successfully bidding in an auction of the defunct company's leases in December. Mervyns liquidated its 149 stores after filing for bankruptcy protection in July 2008.

The demise of legacy department stores benefits Kohl's in other ways, O'Keefe said.

"For some consumers, Mervyn's had left a gap, something between Target and Macy's," she said. "That's a niche that Kohl's fills."

Kohl's began in 1962 from a single store in Wisconsin and now has 1,059 stores in 42 states. Kohl's is a relative newcomer to California, arriving in 2003 and opening 28 stores. The new stores will up the state's total to 121.

Kohl's appears to successfully hone in on a market segment in search of value, said Kimberly Picciola, an analyst who tracks Kohl's for Morningstar Inc.

Kohl's posted a 2.3 percent decline in same-store sales for the second quarter, though most department stores are facing losses in the high single-digit or low double-digit range, Picciola said.

"They're definitely outperforming their peers," she said.

The company has steered clear of huge debt, financing its growth primarily with cash generated by the business, which creates a "nice balance sheet," she said.

The company has also chosen off-mall locations, which could resonate with customers who prefer not to frequent shopping malls, she said.

The company has done well with merchandising, offering value-priced brand-name goods, she said.

Kohl's also distinguishes itself from other department stores by offering more private-label brands, Picciola said.

In recent years the chain has rolled out exclusive brands with cachet, she said, such as the Simply Vera Vera Wang brand, its Food Network brand and licensing agreements with celebrity chef Bobby Flay and skateboard legend Tony Hawk.

"It helps consumers feel as though they are getting good value at a reasonable price," she said.


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