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July 28, 2005

Federate Swaps Out Filenes for Macy's

Federated (NYSE: FD) said Thursday that 68 stores will close following the merger and 330 May stores will be converted to the Macy's brand.

Federated (NYSE: FD), which is based in New York City and operates Macy's and Bloomingdale's stores, is buying St. Louis-based May in a cash and stock deal worth $17 billion. May operates Filene's, Hecht's, Lord & Taylor, Strawbridge's and other stores.

Shareholders of both companies have approved the merger and the deal is expected to close this fall, pending regulatory approval.

The stores that will be closed are in markets where the companies have other stores. In the Albany, N.Y. market there is a Filene's and Macy's in Crossgates Mall and a Macy's in Colonie Center. Federated said it will start closing the "duplicate" stores in 2006.

In closing the stores, the company will comply with existing lease agreements and will offer the stores for sale to the landlords, developers or other parties. Federated expects to continue to employ management from the closed stores and many associates.

The Filene's store in Rotterdam Square Mall is set to become a Macy's following the merger. The store will continue operating under its current name at least through the 2005 holiday season. The company will start converting stores to the Macy's name in the fall of 2006.

Following the conversions, the company will operate approximately 730 Macy's stores, as well as Bloomingdale's stores. The company is still deciding what to do with the Marshall Field and Lord & Taylor brands.

"Customers have told us they want the fashion and affordable luxury they find in Macy's stores," said Terry Lundgren, Federated's chairman, president and CEO, in a press release. "With this expanded geographic coverage, we now will be positioned to nationally advertise the Macy's brand."

Posted by Stephen at July 28, 2005 10:07 PM

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