The Hecht Co. which is completing a multimillion dollar campaign to improve its merchandising image, will put five new department stores in the increasingly affluent Washington region during the next five years.
The unprecedented expansion plan revealed yesterday by Hecht Co. president Allen J. Bloostein, will cost about 540 million. Construction is expected to begin within the next few months on the first store, to be built in a new regional shopping center at Gaithersburg.
Other future Hecht stores will be located in the Annapolis area, near Fairfax County and at an undisclosed site in the Maryland suburbs, of Washington still the subject of negotiation.
A fifth new store will be built in the suburbs of Baltimore whose metropolitan economy is becoming interwined increasingly with that of Washington. Hecht now operates 19 stores in the Washington and Baltimore market's with sales estimated a $250 to $300 million a year.
The expansion program planned by Hecht's will be accompanied by additional spending to modernize existing stores, as the department store completes a conscious drive to improve the quality and mix of its merchandise.
In addition, the commitment by Hecht, a division of the St. Louis-based May Department Stores Co., indicates that retailers expect continued growth in the Washington area and in area residents' incomes.
Bloomingdale's of New York has opened two stores here in recent months. Lord & Taylor has opened a third store and is modernizing existing branches. Neiman-Marcus of Dallas will open next November in Northwest Washington and Woodward & Lothrop has launched a $20 million five year program of renovating its stores. Such national chain stores as J. C. Penney and Montgomery Ward also are expanding here.
Bloostein emphasized yesterday on a walking tour of the Hecht Co. store at Montgomery Mall, expanded to 225,000 square feet and modernized at a cost of $5 million that his firm traditional had attracted lower to moderate-income consumers until he took over as chief executive of the local firm in 1970 and began a program to broaden Hecht's market.
One problem Bloostein faced, he said yesterday, was improving the decor and merchandising of his stores so that Hecht's could begin to attract some of the fashion-oriented retail brands sold by competitors.
For example, last Sunday Hecht added an Elizabeth Arden line of cosmetics for the first time, after seeking fruitlessly for many years to become an approved outlet. In the past 12 months, Hecht also was able to add for the first time Waterford crystal, Karastan carpets and Lenox china.
Hecht's expansion plans also center on the current and anticipated growth of communities outside the immediate metropolitan Washington area. Bloomstein said his firm is studying such markets as Fredericksburg, Va., and Frederick, Md., for future expansion once the current five-year program is completed.
A new report by the Metropolitan Washington Council of Governments has concluded that there was stable growth in the traditional metropolitan area during the years 1970 through 1975, and the population was "fast-growing" outside the counties immediately adjacent to the District.
Cities such as Fredericksburg, Frederick, Annapolis and St. Charles City were mentioned in the council's report as "now experiencing rapid population growth because workers are moving there and commuting to jobs in downtown Washington or its close-in suburbs."
More than 90 per cent of the area's new jobs in the 1970-1975 period were located in the suburbs and increasing proportion of the metropolitan labor force is choosing to live outside the immediate area because of soaring housing prices here, the report said.
Bloostein said yesterday that while Hecht's is committed to "broadening its assortments and quality" of merchandise, including a new line of women's ready-to-wear high fashions by such designers as Calvin Klein, the company's budget store operation will be maintained.
A full line of apparel and accessories is sold at the Hecht budget stores and they account for about 10 per cent of overall annual sales throughout the company. "They are an important part of what we offer . . . we don't want to lose our value image that will be more important as time goes on," he asserted.
Woodward & Lothrop, a principal competitor of Hecht's in the Washington market, recently announced plans to phase out its remaining budget stores. Bloostein said that as his customers' incomes grow, they move on to higher quality and higher priced merchandise within Hecht's.
The retail executive also said Hecht's flagship downtown stores in Washington and Baltimore will remain open since they are large and profitable businesses. All parts of the downtown Washington store, at 7th and F Streets NW, have been renovated in recent years and Hecht's plans to open in the near future a new restaurant called the "Roundhouse," featuring a railroad decor and New York style delicatessen food on the ground floor, facing E Street N.W.
Bloostein said Hecht's will continue to study possible sites within the District for expansion - the company came close to agreeing on a Georgetown site in recent years and has studied lower Connecticut Avenue properties - and said the addition of a new store in the city would not lead to the closing of the main downtown unit.
Among the new sections added to the Hecht Co. store at Montgomery Mall is "Gadgeteria II," featuring large photomural displays of such everyday items as hammers to identify the location of various household products. A new restaurant has been opened and a broad range of products imported from mainland China, Taiwan, Ecuador, Indonesia, India and Korea are on sale - many of them found by Hecht's own expanded buying staff.