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

"Macy's emerged as a premier national retailer in March 2005, whenwe changed Federated's regional department store nameplates," saidTerry J. Lundgren, Federated's chairman, president and chief executiveofficer. "We will continue that process in 2006 by converting many ofMay Company's regional store nameplates to Macy's. With theseadditions, Macy's will operate about 730 stores, representingvirtually every major U.S. market. Customers will benefit from havingthe best of both worlds - the national reach of the Macy's brand,along with community commitment and local focus for which May Companyand Federated are well known.

"We have chosen to proactively announce our decisions as they aremade so that our intentions are clear," Lundgren added. "This decisionto expand the Macy's brand was based on careful study and new researchon customer preferences in May Company communities.

"Customers have told us they want the fashion and affordableluxury they find in Macy's stores. We have strengthened the Macy'sbrand with distinctive assortments, simplified pricing, an improvedshopping experience and enhanced marketing. With this expandedgeographic coverage, we now will be positioned to nationally advertisethe Macy's brand," he said. "And with additional Macy's stores, morecustomers than ever will benefit from our Macy's Star Rewards customerloyalty program, gift cards that can be used across the country and anationwide wedding registry.

"We respect that May Company's regional store names are deeplyrooted in their communities, we appreciate the heritage and traditionsassociated with those names, and we expect to continue to play animportant role in the communities where our customers live and work,"Lundgren said. "At the same time, we also have learned from our ownexperience converting Federated's regional nameplates. Our customerstell us through research and from their behavior that what's inside astore - the merchandise, the service, the people, the shoppingenvironment - is what matters most. And this is where Macy's excels."

The following May Company stores will be renamed Macy's sometimein 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 beenmade, pending further study. The Lord & Taylor name will not beconverted to the Macy's brand.

In conjunction with the conversion process, Federated said it hasidentified 68 duplicate locations in 66 malls which will be divestedstarting in 2006. Included are 41 current May Company stores operatingin 12 states under various nameplates, as well as 27 Federated storesoperating in 14 states as Macy's. Federated said the number ofdivestitures is consistent with its original expectations, and that itwill continue to study the May Company store portfolio in light of themerger. Some plans may change as conversion dates approach. Inaddition to the locations being divested, a small number of stores arebeing studied for potential conversion to the Bloomingdale'snameplate.

Locations identified for divestiture accounted for approximately$2 billion of 2004 sales. (NOTE: A list of affected store locations isattached to this news release.)

Once duplicate stores are divested, the remaining Macy's in thatlocation will include employees from both locations. The companyexpects to employ all management personnel in good standing from bothstores and to offer positions to the vast majority of associates.

"Federated has earned a reputation for attracting and retainingthe best people in retailing," Lundgren said. "By fusing the talentsof Macy's and May Company associates, we believe our stores willmaintain a high level of professionalism, performance and sellingservice for the customer.

"It is important for associates of both companies to understandthat we will be as sensitive and caring as possible throughout thisprocess. We will honor the pledge made previously to May Companyassociates that there will be no workforce reductions or jobeliminations as a result of the merger prior to March 1, 2006," hesaid.

The current plan is to operate all May Company stores under theirexisting nameplates at least through the 2005 holiday shopping season.Divestiture of duplicate May Company and Macy's locations will beginin 2006. They will be offered for sale to landlords, developers andinterested third parties. Federated said it intends to comply with allexisting lease and operating agreements, and the divestiture ofcertain locations will be subject to the satisfactory completion ofnegotiations with various third parties.

Shareholders of Federated and May Company have approved themerger, which is expected to close in the third quarter of 2005,pending completion of regulatory review.

This document contains statements about expected future eventsthat are forward-looking within the meaning of the Private SecuritiesLitigation Reform Act of 1995. Such statements include, but are notlimited to, Federated and May's expectations regarding the anticipatedshareowners meetings, the closing and other statements that are nothistorical facts. Such statements are based upon the current beliefsand expectations of Federated and May's management and are subject tosignificant risks and uncertainties. Actual results could differmaterially from those expressed in the forward-looking statementscontained in this document because of a variety of factors, includinga significant change in the timing of, or the imposition of anygovernment conditions or legal impediments to, the closing of theproposed transaction. Additional factors that may affect the futureresults of Federated and May are set forth in their respective filingswith the SEC, which are available at www.fds.com and www.mayco.com,respectively.

Federated, with corporate offices in Cincinnati and New York, isone of the nation's premier retailers, with annual sales of more than$15.6 billion. Federated operates more than 450 department stores in34 states, Guam and Puerto Rico under the names of Macy's andBloomingdale's. The company also operates macys.com and Bloomingdale'sBy Mail.

(NOTE: Additional information on Federated, including past newsreleases, is available at www.fds.com/pressroom.)
FEDERATED/MAY COMPANY POST-MERGER STORE DIVESTITURE LIST

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
Kaufmann's/Monroeville
Mall Monroeville, PA 262 274 1987
Kaufmann's/Polaris
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
Strawbridge's/Christiana
Mall Newark, DE 214 191 1978
Strawbridge's/Deptford
Mall Deptford, NJ 173 160 1995
Strawbridge's/King of King of Prussia,
Prussia Plaza PA 215 219 1995
Strawbridge's/Lehigh
Valley Mall Whitehall, PA 173 112 1995
Strawbridge's/Montgomery
Mall North Wales, PA 184 418 1995
Strawbridge's/Oxford
Valley Mall Langhorne, PA 178 137 1995
Strawbridge's/Springfield
Mall Springfield, PA 186 252 1997
Strawbridge's/Willow
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
Robinsons-May/Glendale
Galleria Glendale, CA 179 283 1993
Robinsons-May/Los
Cerritos Center Cerritos, CA 153 224 1971
Robinsons-May/Main Place
(north) Santa Ana, CA 149 178 1991
Robinsons-May/North
County Fair (north) Escondido, CA 112 86 1986
Robinsons-May/Northridge
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
Robinsons-May/Plaza
Camino Real Carlsbad, CA 150 144 1969
Robinsons-May/Santa Anita Arcadia, CA 181 224 1976
Robinsons-May/Santa
Monica Place Santa Monica, CA 137 148 1981
Robinsons-May/University
Town Ctr La Jolla, CA 147 176 1978
Robinsons-May/Valley
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