Walgreen Co., the nation's biggest-selling drugstore chain, has secured at least one O'ahu location that could become its first of several Hawai'i stores.

The Deerfield, Ill., company has an agreement to take over the Tower Records store on Ke'eaumoku Street after Tower closes next month.

Walgreens' impending arrival also will bring more choices for consumers and competition for other retailers, particularly the much smaller but better established Longs Drug Stores.

"It's going to be interesting," said Marty Plotnick, a local marketing analyst who wasn't surprised Walgreens was successful in its expansion plan.

"It's a continuation of the retail colonization of Hawai'i," he said. "They should do very well."

The local retail industry has been dramatically reshaped over the past two decades by Mainland-based merchandise giants Kmart, Costco, Wal-Mart, Home Depot, Macy's, Best Buy and others.

Illinois-based Walgreens has been seeking potential Hawai'i store locations for more than a year, and in August 2005 was negotiating for space at Pearl Kai Shopping Center.

But the company has previously declined to comment on its prospects for Hawai'i stores.

Recently, Walgreens arranged to assume several leases in several states from Tower Records, which filed bankruptcy in August and is being liquidated.

According to a Nov. 17 bankruptcy court filing in Delaware, Tower's parent company said it intends to assign Tower's lease on Ke'eaumoku to Walgreen Co., which intends to use the site for retail sales.

A Walgreens representative yesterday could not be reached for comment after business hours.

An official with Tower's Ke'eaumoku landlord, Morita Co., said the company could not immediately comment.

It was not disclosed in the bankruptcy filing when Walgreens expects to start business or whether it plans to make major changes to the Tower property.

Tower, which has been liquidating inventory and property assets since a liquidation firm bought the company in October, expects to close all of its 89 stores in 20 states, including three in Hawai'i, by mid-December.

Retail Consulting Services, a New York-based firm that acquired Tower's leases, is in the process of selling the leases.

Spence Mehl, a senior vice president with Retail Consulting, said deals have not been finalized for Tower's Ke'eaumoku and Kahala Mall stores. But he said the lease for Tower's third Hawai'i store, at Pearl Kai, was transferred back to the landlord.

Pearl Kai owner La Caze Development Co. of California could not be reached yesterday. But last year, company president Norm La Caze said he had been negotiating with Walgreens to open a store at the center.

Kahala Mall General Manager Ron Yoda said he hasn't been told who might assume Tower's Kahala lease, but he doubts Walgreens would find the space attractive because of it's second-floor space on the exterior of the enclosed mall.

Tower's Kahala store is about 10,000 square feet and was formerly occupied by a restaurant.

Tower's Ke'eaumoku store is about 11,000 square feet, according to property records.

The typical Walgreens store is 14,500 square feet.

Because Walgreens has relatively small stores (a typical Longs is 23,000 square feet), it was expected that the company wouldn't have too much trouble finding suitable real estate to enter Hawai'i.

Walgreens also is on an aggressive expansion push, with a goal to have 7,000 stores by 2010. The company has about 5,515 stores in 47 states and Puerto Rico, and plans to open 500 stores in the fiscal year ending August 2007.

In Hawai'i, Walgreens likely would pull sales from supermarkets, convenience stores and big-box outlets, but most closely would compete with Longs, the California-based chain that many kama'aina regard as a local sales institution.

Longs, founded in 1938 in California, has forged a strong relationship with residents since opening its first Hawai'i store in 1954. But with 505 stores in six states (31 in Hawai'i), Longs is roughly a tenth the size of Walgreens.

Walgreens and Longs both evolved from small neighborhood drugstores into chains selling food, cosmetics, gifts, school supplies, photo processing and other general merchandise, from auto accessories to gardening materials.

Most Walgreens stores have drive-through pharmacies, and many are open 24 hours. In the past couple of years, Longs also has begun adding drive-through pharmacies, and has launched a chainwide store remodeling program.

Plotnick, the local marketing analyst, said both Longs and Walgreens have devout customer bases to draw from. "The Longs customer here has grown up with (Longs)," he said. "(Walgreens) has an equity and cachet of name for all the transplants. They'll be a good competitor for Longs."

Reach Andrew Gomes at agomes@honoluluadvertiser.com.