KOHL'S HEADS WEST: LOCAL STORES BRACE FOR THE SHOCK WAVES.(Brief Article)

LOS ANGELES -- It's not an earthquake, but the heavy footsteps of Kohl's Corp. approaching across the Rockies that's causing trembling on California's retail shelves.

The Menomonee Falls, Wis.-based retailer, preparing to stage its biggest expansion yet here next year, is expected to shake up the retail scene -- and perhaps dislodge some established players. Forty Kohl's doors are set to open in Southern California, Arizona and Nevada starting in the first quarter of 2003. Observers expect the retailer to deploy a strategy honed to a science over several years: Open all the doors over one or two days, leveraging a massive advertising and promotional push it begins months in advance. Already, paint is dry on a 650,000-square-foot, state-of-the-art distribution center on a former air force base in San Bernardino, Calif.

It's that kind of tightly coordinated, take-no-prisoners approach to expansion that has retailers of all sorts cringing.

"If I was going to rate Kohl's on a one to 10 scale, they would be an 11.5," said Bruce Berton, director of accounting and consulting firm Stonefield Josephson. "They are going to give the retailers here a swift kick in their lethargic ways of doing business."

"There's no question this will have an impact on Robinsons-May, Mervyn's and most of the department stores and mass merchants in the market," said Linda Kristianses, an analyst with UBS Warburg. "Typically, the impact is several hundred basis points. Each company within the competitive circle usually loses 2 to 4 percent" on sales.

The 420-store chain is one of the industry's hottest growth stories. Revenues swelled 21.7 percent to $7.49 billion last year, marking nine years of continuous sales growth. Following Kohl's recent expansions into Houston (12 stores opened in March) and Boston (13 stores opened in April), department stores and discounters alike have had chunks bitten out of sales.

With the upcoming push into Southern California, analysts said one player is particularly vulnerable. Kohl's, symbol KSS, could be the kiss of death for Target Corp.'s beleaguered Mervyn's chain, analysts speculated. The moderate chain, with its slogan "Big Brands, Small Prices," parallels Kohl's in its strategy of offering national brands like Levi's, LEI and Unionbay at prices lower than those of department stores. Mervyn's, however, lacks Kohl's aggressive pricing…