In late June, Sears will introduce health food shops in 10 of its full-line stores in California, bringing to the states a concept it has offered successfully in Canada for 18 years.

The retailer has sold health products in its Canadian stores through Claydan Enterprises Inc., recently acquired by fitness company Cetalon Corp., which will continue to own and manage the U.S. shops.

The boutique-style shops will operate as store departments called Sears Health & Nutrition Centers and will carry national brand vitamins and herbs, including TwinLabs, Nature’s Way and Country Life, plus nutritional systems and health technology. According to Sears and Cetalon, the shops’ knowledgeable, trained staff sets them apart from stores that just sell products. Sears believes this store-within-a-store can concept enhance the shopping experience, according to Jack Krings, Sears’ vp and general manager for licensed businesses. “[Cetalon is] a model we feel fits with our customers,” he told DSN Retailing Today. “They’re a service-oriented company and can offer products our customer wants. They have expertise that would be hard for us to replicate as quickly as we would like. We think it will provide something beyond what [Sears] could do alone.”

“Sears discovered their customers are very heavy buyers in the [health food] category; they’re just doing it somewhere else,” Cetalon ceo Harvey Goldstein said. Moreover, Sears’ substantial market share in fitness equipment complements Cetalon’s offerings, he added. Sears decided to test the concept’s viability in the health-oriented Los Angeles and San Francisco markets before expanding it nationwide. According to Krings, the test process includes learning what part of the Sears store the Cetalon shops work best in, which is why they will be located in varying spots in the 10 California stores.

Based on results from the Canadian stores, Cetalon expects roughly 80% of sales to come from vitamins and supplements, about 14% from natural body care and 5% to 7% from informational products such as books, tapes and technical gadgets.

“It’s what you would find in a health food store but not in a traditional department store or mass-market store,” Goldstein said.

Both companies benefit from the synergies of the store-within-a-store model, which gives Cetalon access to Sears’ customer base, Cetalon vice chairman and cfo John Bryan said. The startup firm likes Sears’ customer loyalty and especially where its management is taking the company.

“They’re a progressive, sophisticated retailer,” Goldstein said. “Looking 10 years out, we really like our partner.”

Cetalon is developing a private-label brand of vitamins and herbs exclusive to Sears, consisting of two full lines containing 70 to 120 skus, according to Goldstein, who added the brand won’t carry the Sears name.

The shops will also sell home healthcare products such as oxygen bottles and wheelchairs and what Cetalon calls a new wave of health information technology. For example, the California stores will feature a weight-management machine called BodyGem, where for about $15 a pop customers can have their oxygen consumption measured and thus determine their precise metabolic rate.

Sears is the only mass retail channel where BodyGem, also offered in physicians’ offices and some high-end health clubs, will be carried, Bryan said. Cetalon sells an accompanying software package tailored for hand-held devices that can analyze a person’s daily food intake.

“Our strategy is to take the vitamin/minerals/supplements category to a new level of science and technology,” Bryan said.

The Southern California stores are set to pre-open June 23, with a grand opening planned for about July 1, near the time the Bay Area stores will pre-open. Cetalon and Sears are shooting for annual sales of $500,000 per store initially, although ultimate goals are higher. Cetalon hopes to eventually expand the shops beyond Sears.