An intriguing note on Washington's Woodward & Lothrop Inc. turned up recently in an industry report by Wheat First Securities, a Richmond-based securities firm.

What makes the report interesting is that, for the first time, someone has decided to put into print what had been the subject of a spate of recent rumors that Woodies officials had denied in the past.

Nonetheless, Wheat First Securities will be "keeping our eye on" Woodies, said Kenneth Gassman Jr., assistant vice president at the securities firm.

Gassman follows the progress of several Washington-area retailers, in fact, and his assessment of those companies may provide a clue to retail trends that may develop over the next year.

Indeed, his capsule account of Woodies' purported plans may offer a preview of what could be the most significant development in local retailing.

Woodies officials have concluded that the chain no longer can maintain its corporate viability and growth by remaining exclusively in the department store business, Gassman said. That segment of the retailing business is "acknowledged to be a mature, and perhaps declining, sector," he added.

"While Woodward & Lothrop has not released its growth plans, we believe that the company could be looking at new start-up specialty retailing concepts," Gassman said.

Woodies may be interested in acquiring other established retailers, he added.

Robert J. Mulligan, Woodies' vice chairman and chief administrative officer, denied similar reports recently when asked about the company's growth plans.

Mulligan acknowledged that retailers in general have not been building large stores, or many new stores for that matter, but he denied that Woodies has any plans to embark on a new concept in retailing. Mulligan declined, however, to elaborate on Woodies' growth plans.

Gassman maintains that Woodies is considering at least three possibilities that would enhance profits and solidify its position as the leading department store chain in the region.

"I think you have seen the last of their 150,000- to 200,000-square-foot stores," he observed.

What that means is that we're likely to see smaller Woodies stores or specialty retail stores owned by the chain but operated under a different trade name, he added.

Gassman said still another possibility is a decision to broaden the company's asset base by developing office complexes. Woodies "could use its extensive real estate holdings in the Washington, D.C., area as the springboard for growth, perhaps in areas other than retailing," he suggested.

That part of the scenario sketched by Gassman already has been explored in some detail by Woodies. For example, it has entered into a joint venture agreement to redevelop the so-called North Block, site of its annex store in downtown Washington.

The project, which Woodies projected last year as a $200 million development, would be built in the heart of the old retail core, between the chain's flagship store and the new convention center. In its annual report to shareholders this year, Woodies said the transaction will provide the company with "a total value of $33 million."

Woodies also plans a major new development adjacent to its Chevy Chase store, where plans call for construction of a hotel and office complex on property that is used now as a parking lot. Development of that property also would "result in additional revenue" for the company, Woodies noted.

Gassman said that the real estate development plans and other projects that he outlined are being studied carefully as part of a master plan on asset evaluation, asset re-evaluation and asset deployment.

After Gassman's disclosure in his firm's latest edition of its Industry Update, it's a safe bet that Wheat First Securities won't be alone in "keeping an eye" on Woodies.