Duane Reade's New Format Steps Up Beauty Battle

Duane Reade's New Format Steps Up Beauty Battle

Duane reade wants to eat department stores' lunch at least when it comes to beauty.

The retailer has unveiled a glittering beauty concept at 40 Wall Street in downtown Manhattan. Inside a vast, vaulted hall with marble arches lies an express hair salon, nail polish bar, virtual makeover station and fragrances galore. The 22,000-square-foot store is Duane Reade's largest outpost and marks the drugstore chain's and perhaps the industry's most dramatic attempt to reinvent the sector's beauty department and gain market share from department stores. They still have a long way to go, however, especially in fragrance: In 2010, department stores held a 47.6 percent share of U.S. fragrance sales, which totaled $5.3 billion, while drugstores accounted for 9.8 percent of overall sales, according to Euromonitor International.

Duane Reade's new design, housed in an old bank, builds upon its upscale beauty concept called Look Boutique, which the chain introduced nearly two years ago. Currently, there are 21 stores outfitted with the assisted, open-sell concept.

This is the Look Boutique on steroids, said Joe Magnacca, president of Daily Living Products and Solutions of Walgreen Co. and president of Duane Reade, as he passed by the store's fresh juice bar and sushi counter (fresh rolls are made daily) and through an aisle of organic cereals en route to the beauty area.

Within the store, additions to the Look Boutique concept include the Phyto Universe, a three chair salon that offers hair and...