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Federated Announces Plan to Expand Macy's Brand in 2006; About 330 May Company Stores to Convert to Macy's Nameplate Following Merger Author: Press Release Publication: Press Release Date of Publication: July 28th, 2005 Corresponding Retail Development: Natick Mall Corresponding Town: Natick Web Site Link: http://phx.corporate-ir.net/phoenix.zhtml?c=84477&p=irol-newsArticle&ID=736315 Text: CINCINNATI--(BUSINESS WIRE)--July 28, 2005--Federated Department Stores, Inc. (NYSE:FD)(PCX:FD) today announced it will add about 330 Macy's locations nationwide in 2006 as it converts regional department store nameplates to be acquired through its pending merger with The May Department Stores Company. "Macy's emerged as a premier national retailer in March 2005, when we changed Federated's regional department store nameplates," said Terry J. Lundgren, Federated's chairman, president and chief executive officer. "We will continue that process in 2006 by converting many of May Company's regional store nameplates to Macy's. With these additions, Macy's will operate about 730 stores, representing virtually every major U.S. market. Customers will benefit from having the best of both worlds - the national reach of the Macy's brand, along with community commitment and local focus for which May Company and Federated are well known. "We have chosen to proactively announce our decisions as they are made so that our intentions are clear," Lundgren added. "This decision to expand the Macy's brand was based on careful study and new research on customer preferences in May Company communities. "Customers have told us they want the fashion and affordable luxury they find in Macy's stores. We have strengthened the Macy's brand with distinctive assortments, simplified pricing, an improved shopping experience and enhanced marketing. With this expanded geographic coverage, we now will be positioned to nationally advertise the Macy's brand," he said. "And with additional Macy's stores, more customers than ever will benefit from our Macy's Star Rewards customer loyalty program, gift cards that can be used across the country and a nationwide wedding registry. "We respect that May Company's regional store names are deeply rooted in their communities, we appreciate the heritage and traditions associated with those names, and we expect to continue to play an important role in the communities where our customers live and work," Lundgren said. "At the same time, we also have learned from our own experience converting Federated's regional nameplates. Our customers tell us through research and from their behavior that what's inside a store - the merchandise, the service, the people, the shopping environment - is what matters most. And this is where Macy's excels." The following May Company stores will be renamed Macy's sometime in fall 2006: -- Famous-Barr locations in Illinois, Indiana, Kentucky and Missouri; -- Filene's locations in Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont; -- Foley's locations in Colorado, Louisiana, New Mexico, Oklahoma and Texas; -- Hecht's locations in Maryland, North Carolina, Pennsylvania, Tennessee, Virginia and the District of Columbia; -- The Jones Store locations in Kansas and Missouri; -- Kaufmann's locations in New York, Ohio, Pennsylvania and West Virginia; -- L.S. Ayres locations in Indiana; -- Meier & Frank locations in Oregon, Utah and Washington; -- Robinsons-May locations in Arizona, California and Nevada; and -- Strawbridge's locations in Delaware, New Jersey and Pennsylvania. A decision regarding the Marshall Field's name has not yet been made, pending further study. The Lord & Taylor name will not be converted to the Macy's brand. In conjunction with the conversion process, Federated said it has identified 68 duplicate locations in 66 malls which will be divested starting in 2006. Included are 41 current May Company stores operating in 12 states under various nameplates, as well as 27 Federated stores operating in 14 states as Macy's. Federated said the number of divestitures is consistent with its original expectations, and that it will continue to study the May Company store portfolio in light of the merger. Some plans may change as conversion dates approach. In addition to the locations being divested, a small number of stores are being studied for potential conversion to the Bloomingdale's nameplate. Locations identified for divestiture accounted for approximately $2 billion of 2004 sales. (NOTE: A list of affected store locations is attached to this news release.) Once duplicate stores are divested, the remaining Macy's in that location will include employees from both locations. The company expects to employ all management personnel in good standing from both stores and to offer positions to the vast majority of associates. "Federated has earned a reputation for attracting and retaining the best people in retailing," Lundgren said. "By fusing the talents of Macy's and May Company associates, we believe our stores will maintain a high level of professionalism, performance and selling service for the customer. "It is important for associates of both companies to understand that we will be as sensitive and caring as possible throughout this process. We will honor the pledge made previously to May Company associates that there will be no workforce reductions or job eliminations as a result of the merger prior to March 1, 2006," he said. The current plan is to operate all May Company stores under their existing nameplates at least through the 2005 holiday shopping season. Divestiture of duplicate May Company and Macy's locations will begin in 2006. They will be offered for sale to landlords, developers and interested third parties. Federated said it intends to comply with all existing lease and operating agreements, and the divestiture of certain locations will be subject to the satisfactory completion of negotiations with various third parties. Shareholders of Federated and May Company have approved the merger, which is expected to close in the third quarter of 2005, pending completion of regulatory review. This document contains statements about expected future events that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, Federated and May's expectations regarding the anticipated shareowners meetings, the closing and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of Federated and May's management and are subject to significant risks and uncertainties. Actual results could differ materially from those expressed in the forward-looking statements contained in this document because of a variety of factors, including a significant change in the timing of, or the imposition of any government conditions or legal impediments to, the closing of the proposed transaction. Additional factors that may affect the future results of Federated and May are set forth in their respective filings with the SEC, which are available at www.fds.com and www.mayco.com, respectively. CONTACT: Federated Department Stores, Inc. Media - Jim Sluzewski, 513-579-7764 Investor - Susan Robinson, 513-579-7780 SOURCE: Federated Department Stores, Inc. Federated, with corporate offices in Cincinnati and New York, is one of the nation's premier retailers, with annual sales of more than $15.6 billion. Federated operates more than 450 department stores in 34 states, Guam and Puerto Rico under the names of Macy's and Bloomingdale's. The company also operates macys.com and Bloomingdale's By Mail. (NOTE: Additional information on Federated, including past news releases, is available at www.fds.com/pressroom.) FEDERATED/MAY COMPANY POST-MERGER STORE DIVESTITURE LIST CONTACT: Federated Department
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