Federated Announces Plan to Expand Macy's Brand in 2006; About 330 May Company Stores to Convert to Macy's Nameplate Following Merger

CINCINNATI--()--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.

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.)


Current May Company stores
                                             Sq. Ft.            Date
Nameplate/Location        City/State          (000)   Employees Opened
------------------        ----------         ------   --------- ------
Famous-Barr/ Eastland
 Mall                     Evansville, IN        180        138   1996
Filene's/Burlington Mall  Burlington, MA        182        262   1968
Filene's/Cape Cod Home
 store                    Hyannis, MA            40         23   1970
Filene's/Crossgates Mall  Albany, NY            201        170   1994
Filene's/Crystal Mall     Waterford, CT          90        153   1984
Filene's/Danbury Fair
 Mall                     Danbury, CT           172        269   1986
Filene's/Maine Mall -
 Main/Men's               Portland, ME          157        226   1983
Filene's/Trumbull         Trumbull, CT          200        222   1978
Hecht's/Wheaton           Wheaton, MD           179        235   1987
 Mall                     Monroeville, PA       262        274   1987
 Fashion Place            Columbus, OH          200        174   2001
Kaufmann's/Richland       Mansfield, OH         132         99   1969
Kaufmann's/South Hills
 Village                  Pittsburgh, PA        258        284   1987
Kaufmann's/Mall at Tuttle
 Crossing                 Columbus, OH          227        188   2003
L.S. Ayres/Castleton
 Square                   Indianapolis, IN      207        284   1990
Strawbridge's/Cherry Hill
 Mall                     Cherry Hill, NJ       258        267   1961
 Mall                     Newark, DE            214        191   1978
 Mall                     Deptford, NJ          173        160   1995
Strawbridge's/King of     King of Prussia,
 Prussia Plaza             PA                   215        219   1995
 Valley Mall              Whitehall, PA         173        112   1995
 Mall                     North Wales, PA       184        418   1995
 Valley Mall              Langhorne, PA         178        137   1995
 Mall                     Springfield, PA       186        252   1997
 Grove Park               Willow Grove, PA      235        213   1988
Robinsons-May/Del Amo
 Fashion Center           Torrance, CA          180        298   1981
Robinsons-May/Fiesta Mall Mesa, AZ              159        135   1979
Robinsons-May/Fox Hills   Culver City, CA       150        159   1975
 Galleria                 Glendale, CA          179        283   1993
 Cerritos Center          Cerritos, CA          153        224   1971
Robinsons-May/Main Place
 (north)                  Santa Ana, CA         149        178   1991
 County Fair (north)      Escondido, CA         112         86   1986
 Fashion Center           Northridge, CA        191        218   1995
Robinsons-May/The Oaks
 S.C. (south)             Thousand Oaks, CA     150         86   1978
Robinsons-May/Pacific     San Buenaventura,
 View Mall                 CA                   205        158   1999
 Camino Real              Carlsbad, CA          150        144   1969
Robinsons-May/Santa Anita Arcadia, CA           181        224   1976
 Monica Place             Santa Monica, CA      137        148   1981
 Town Ctr                 La Jolla, CA          147        176   1978
 Plaza S.C.               Bakersfield, CA       130        156   1988
Robinsons-May/Victoria    Rancho Cucamonga,
 Gardens                   CA                   180        221   2004

Current Macy's stores
                                             Sq. Ft.            Date
Division/Location         City/State          (000)   Employees Opened
------------------        ----------         ------   --------- ------
Macy's Central/Eastland
 Mall                     Columbus, OH          245        184   1967
Macy's Central/Greenwood  Greenwood, IN         160        168   1980
Macy's Central/Ross Park  Pittsburgh, PA        201        220   1986
Macy's East/Fair Oaks     Fairfax, VA           220        273   2000
Macy's East/Marley
 Station                  Glen Burnie, MD       267        195   1987
Macy's East/Natick Mall   Framingham, MA        211        275   1994
Macy's East/Northshore
 Mall                     Peabody, MA           301        325   1958
Macy's East/Owings Mills  Owings Mills, MD      267        228   1986
Macy's East/Pheasant Lane Nashua, NH            128        141   1986
Macy's East/Southshore
 Plaza                    Braintree, MA         303        261   1967
Macy's East/Warwick Mall  Warwick, RI           309        289   1970
Macy's East/Westgate Mall Brockton, MA           73        118   1977
Macy's East/White Marsh   Perry Hall, MD        198        182   1981
Macy's Northwest/Valley
 River Mall               Eugene, OR            123        127   1990
Macy's West/Coronado
 Center                   Albuquerque, NM       153        157   1976
Macy's West/Galleria at
 Tyler                    Riverside, CA         156        180   1970
Macy's West/Houston
 Galleria                 Houston, TX           256        322   1986
Macy's West/Inland Center San Bernardino, CA    145        193   1966
Macy's West/Lakewood
 Center                   Los Angeles, CA       208        254   2000
Macy's West/Mission Viejo Mission Viejo, CA     197        243   1980
Macy's West/Montclair
 Plaza                    Montclair, CA         147        206   1968
Macy's West/North Star
 Mall                     San Antonio, TX       178        185   1997
Macy's West/Palm Desert -
 apparel/home             Palm Desert, CA       195        303   1983
Macy's West/Paradise
 Valley                   Phoenix, AZ           184        199   1991
Macy's West/Stonebriar
 Mall                     Dallas, TX            210        160   2000
Macy's West/West Covina   West Covina, CA       150        225   1975


Federated Department Stores, Inc.
Media - Jim Sluzewski, 513-579-7764
Investor - Susan Robinson, 513-579-7780


Federated Department Stores, Inc.
Media - Jim Sluzewski, 513-579-7764
Investor - Susan Robinson, 513-579-7780