CINCINNATI--(BUSINESS WIRE)--Oct. 25, 2005--Federated Department
Stores, Inc. (NYSE:FD)(PCX:FD) today announced it will consolidate
credit-related support facilities acquired in its merger with The May
Department Stores Company. These moves will improve operating
efficiencies and enhance customer service by coordinating technology
and capital investments.
May Company's Earth City credit center in St. Louis will be
retained as a fourth operational hub of Federated's Cincinnati-based
Financial, Administrative and Credit Services (FACS) Group division.
Earth City will join current FACS facilities in Mason, OH,
Clearwater, FL, and Tempe, AZ, in servicing private label and VISA
credit card accounts for each of Federated's department store
divisions. FACS also performs a variety of non-store services for
customers and employees.
In addition, Federated will expand the main FACS facility in
Mason, OH, while phasing out former May Company credit operations in
Lorain and Parma, OH, and Houston, TX, beginning in spring 2006.
Included are the Lorain credit facility and credit billing functions
housed at May's Great Lakes Data Center (with a total of approximately
760 positions), a credit remittance center in Parma (approximately 35
positions) and the Houston credit center (approximately 380
positions).
Executives at these facilities will be asked to express their
interest in relocating to other FACS operations with open positions.
The company reiterated its pledge 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.
"Consolidation decisions are the result of careful study regarding
the size and location of facilities required to support the combined
company's financial credit and administrative services needs," said
FACS Group President Amy Hanson. "With the May Company merger, we will
be able to combine the best of two excellent credit operations. By
consolidating and streamlining our organization, we will maintain and
improve the high quality and efficiency of service our customers and
associates have come to expect."
Credit facility consolidations are consistent with Federated's
previously announced estimates to realize approximately $175 million
in cost synergies in 2006 and $450 million in annual cost synergies in
2007 and beyond as a result of the May Company merger. Expenses
associated with the consolidations are included in the previously
announced estimate of approximately $1 billion in one-time costs
spread over three years beginning in 2005.
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's expectations regarding the anticipated
closings of the remaining credit portfolio transactions, statements
about the benefits of the credit portfolio sales and the marketing
initiatives, including future financial and operating results, the
company's plans, objectives, expectations and intentions and other
statements that are not historical facts. Such statements are based
upon the current beliefs and expectations of Federated'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 the conditions to closing of the proposed transactions
contained in the transaction agreements. Additional factors that may
affect the future results of Federated are set forth in its filings
with the SEC, which are available at www.fds.com.
Federated, with corporate offices in Cincinnati and New York, is
one of the nation's premier retailers, with 2004 sales of more than
$15.6 billion. With the May Company's 487 department stores and 710
bridal and formalwear stores in 47 states, the District of Columbia
and Puerto Rico, Federated operates nearly 950 department stores and
more than 700 bridal and formalwear stores in 49 states, the District
of Columbia, Guam and Puerto Rico under the names of Macy's,
Bloomingdale's, Famous-Barr, Filene's, Foley's, Hecht's, Kaufmann's,
Lord & Taylor, L.S. Ayres, Marshall Field's, Meier & Frank,
Robinsons-May, Strawbridge's, The Jones Store, David's Bridal, After
Hours Formalwear and Priscilla of Boston. 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.)
CONTACT: Federated Department Stores, Inc.
Media
Jim Sluzewski, 513-579-7764
Sharon Bateman, 314-342-6494
or
Investor
Susan Robinson, 513-579-7780
SOURCE: Federated Department Stores, Inc.
