SMITTY'S CHANGES TO FRED MEYER FORMAT

PHOENIX -- Smitty's, a major name in retailing here for 35 years, disappeared abruptly last week when Portland, Ore.-based Fred Meyer converted 17 Smitty's Marketplace stores to the Fred Meyer Marketplace banner, concurrent with conversion of the stores to an everyday low pricing format.

th's acquired Smitty's in 1996 and was in turn acquired by Fred Meyer in 1997. At the time of that merger Fred Meyer officials said they would renovate the Smitty's stores, which average 115,000 square feet, to make them more like Fred Meyer's multi-department stores by adding more than 50,000 stock-keeping units of general merchandise; That's also when Fred Meyer renamed the stores Smitty's Marketplace.

Chain officials said Fred Meyer has invested $100 million to remodel 15 of the Smitty's stores, with two more scheduled for upgrading later this year.

According to Mary Sammons, president and chief executive officer of Fred Meyer Stores, "The money we have spent over the past year on remodeling these stores have brought them much closer to the Fred Meyer concept for department alignments, product offerings and decor. Now we are taking them the rest of the way."

Accordingly, the Smitty's Marketplace stores were closed for two days at the close of business Jan. 30 while all products with the Smith's or Smitty's name were removed and the stores were retagged and remerchandised as smaller versions of Fred Meyer multidepartment stores.

When they reopened unofficially last Tuesday, with more formal grand openings last Wednesday, Smith's Fresh Values frequent- shopper card was gone and the stores' high-low pricing had been replaced with Fred Meyer's everyday low-pricing program.

Sammons said a name change was desirable "[because] we felt it would be too hard to highlight the differences of our new concept and too confusing for customers if we kept the Smitty's name while adopting a new everyday low-food pricing strategy to replace the Fresh Values card."

She said the name change will facilitate plans to build full-scale Fred Meyer stores here in the future. A Fred Meyer spokesman said the company is currently building stores in two prototypes -- one of 130,000 square feet, the other of 165,000 square feet; the chain's average store is 150,000 square feet, he added.