Meanwhile, the company is divesting 80 department stores inmalls where this is duplication with other brands. So far Federatedhas sold 46 and is close to divesting another 18, with proceeds tototal $400 million to $500 million.
Federated, which operates 850 department-store units, isconverting the regional brands it acquired from May, totaling about400 stores, into Macy's in September. Management says theconversion, which includes remodels and the replacement of signage,will cost around $400 million.
During the first quarter, which ended April 29, same-store saleswere flat year over year, on $5.9 billion in revenue. The company'sbest-performing region was Macy's Florida, while the chain laggedin its Northern and Midwestern divisions. Due to integration costswith May and inventory adjustments, Federated's income was $20million, compared to $252 million during the same year-agoperiod.
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