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The day we all knew would arrive is here. Wal-Mart has eclipsed JCPenney to become the country's largest seller of home textiles products in HTT's Top 50 Retailers ranking.

For those Bentonville employees not toiling in the home furnishings department, this may come as a minor piece of news. After all, Wal-Mart long ago became the nation's leading seller of videotapes, toys, food and many other products.

Make no mistake, Penney deserves a lot of credit for hanging onto the top spot for so long — particularly given the difficulties with which the venerable nameplate has been wrestling over the past five years.

Two things are important to note about this transition. First, the retailers are separated by only $46 million in sales. Second, Penney's slip into second place does not mean it does a poorer job of selling textiles than Wal-Mart.

For one thing, it places much greater emphasis on the category than does the discounter. Home textiles also account for a more substantial portion of total sales at Penney than at Wal-Mart — 12.5 percent vs. 2.0, respectively. And when it comes to slicing up the overall home textiles market, the two are nearly even: Wal-Mart owns 10.9 percent, Penney owns 10.7 percent.

Penney also — as a matter of pure mathematical averages — does more than twice as much volume in home textiles sales per store than Wal-Mart: an average of $2.11 million per year per store for Penney vs. an average of $911,000 per year per store for Wal-Mart.

Wal-Mart nosed into the top spot by adding 208 stores to its base during the same period that Penney sheared a net 32 stores from its own. If the units Penney closed had been capable of producing the $2.11 million average in annual home textiles sales — which they probably weren't, but just for the sake of argument — Penney would have ended the year at $2.41 billion, just a hair ahead of Wal-Mart's $2.39 billion.

Ah, but where do we go from here? Probably in the same direction. Penney will close 44 additional stores this year. Wal-Mart will add more than 100.

Nonetheless, there are a couple of other horse races worth watching.

First, the potential battle between number-three Kmart and number-four Target. Although the Minneapolis middleweight has a store base 50 percent smaller than Kmart's, the combination of its new store openings and home textiles sales gains should add approximately $100 million in sales this year. Kmart, which will not open new units this year and is growing home textiles sales at a much slower rate, could find itself knocked into fourth place.

It will not be a comfortable position. Bed Bath & Beyond — currently number-five — has added more than $200 million in home textiles sales each year since 1998. It's not likely to dislodge number-four in 2001; however, 2002 looks promising.

But the real filly to train your binoculars on is Kohl's, which leapt from 11th place to ninth place in this year's ranking. It trailed number-eight TJ Maxx/Marshalls by just $34 million. With an ambitious store opening plan on the boards this year, it should be able to add at least twice that much.

Who says there's no drama in the home textiles business?

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