Federated to Convert 330 May Stores to Macy's

Cincinnati, July 28--Federated Department Stores, Inc. 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. "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. "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." 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. 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. 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.

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