• The Wall Street Journal (subscription required), Thursday, February 8, 2007 11:15 AM

Reflecting widespread thinking in the beauty industry that department stores' customers can be poached, Walgreen is stocking up on European products packed with ingredients like caviar and seaweed.

Its high-profile experiment--dubbed the European Beauty Collection--tests whether Walgreen's shoppers will pay $10 to $60 for creams, scrubs and lotions, some of which are sold in upscale department stores and spas in Europe. In October, it introduced seven skin-care lines from five countries--France, Spain, Greece, Germany and Switzerland--at nearly 1,000 of its stores.

Walgreen has been reporting solid sales and profits, but it wants to counter rivals such as CVS by better tailoring merchandise to individual neighborhoods and doing more to appeal to women.

"This is indicative of what we're going to do more of in the future: exclusive, private-label brands," says CEO Jeffrey Rein.

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