Federated To Become Macy's Group

Last year Federated sold off $4.5 billion in operations, including its bridal and Lord & Taylor chains, which it acquired as part of its acquisitionof May Department Stores in 2005. But executives don't expect any more major sell-offs or store closings this year beyond normal operations, said Karen Hoguet, Federated's chief financial officer, in a conference call.

Federated forecasts eight store openings this year – six full-line units and two furniture stores. Same-store sales are predicted to come in at a 2% to 3% increase from 2006 for the full year.

During its fourth quarter, which ended Feb. 3, same-store sales rose 6.1% year over year. Total sales fell 4.3%, to just less than $9.2 billion, due to the closure of 80 duplicate stores as a result of the May acquisition. Some stores purchased in that deal, which were converted from regional department-store chains into Macy's, are still not up to speed, Hoguet says, because it has taken a while for them to build a customer base.

For the fiscal year in 2006, same-store sales rose 4.4% from the prior year. Federated opened one new Bloomingdale's store in the fourth quarter, as well as one replacement Bloomingdale's. The company also opened two replacement Macy's stores in Florida that were damaged by hurricanes. Federated operates about 850 stores across the country.