Federated Unveils ``Reinvent'' Stores Nationally; New Features to be Incorporated in 42 Stores in Time for 2002 Holiday Shopping Season.

Business & Consumer/Retail Editors

CINCINNATI--(BUSINESS WIRE)--Sept. 24, 2002

Federated Department Stores, Inc. (NYSE:FD)(PCX:FD) today released a listing of 42 stores nationwide that will be upgraded with the latest components of the company's "reinvent the department store" strategy in time for the 2002 holiday season.

By mid-November, the company said 34 of its existing stores will be retrofitted with such current reinvent elements as enhanced fitting rooms, high-visibility directional signage, convenient price-check devices, comfortable lounge areas, in-store computer kiosks, revamped juniors and young men's departments, shopping carts and numerous innovative merchandising and visual presentations. An additional eight new Federated stores will open this fall with reinvent innovations already in place.

"We've made a powerful commitment to the process of constantly reinventing and improving the department store," said James M. Zimmerman, Federated's chairman and chief executive officer. "This initial rollout of our most successful reinvent strategies represents the fastest and most comprehensive introduction of new store initiatives in Federated's history, and it is an important milestone on our path of continuous improvement."

Zimmerman emphasized that as the company's reinvent strategy continues to evolve, the most successful elements will be integrated incrementally into all new and remodeled full-line Federated store locations over time.

"Through our reinvent initiatives, we are able to remain focused on those ideas that best meet evolving customer expectations," said Terry J. Lundgren, Federated's president, chief operating officer and chief merchandising officer. "We are continuously listening to the needs of our customers and then directing our reinvent strategies to meet them. The results are seen in our rejuvenated department stores with an emphasis on fashion and newness, distinctive presentation, ease of navigation, and above all, greater convenience and simplicity in the entire shopping experience."

Federated announced two years ago an ambitious process of "reinventing the department store" by testing a wide range of innovative design and merchandising concepts in selected pilot stores, then rolling out the most successful elements to other locations. Numerous elements of the initial reinvent strategy were tested in full-force beginning last fall, when Federated opened a prototype store in Columbus, OH. This Lazarus at Easton Town Center was named "Store of the Year" by Chain Store Age.

All "reinvent" stores, a listing of which is attached, will feature most of the following:

-- An environment appealing to younger customers in dynamic new Juniors and Young Men's departments, including high-energy visual presentation, lighting and club-like department design; plus high quality music systems and upscale vending machines.

-- A newly designed Children's department, including the exclusive new Greendog brand of footwear, color-coded sizing and enhanced visuals.

-- Contemporary fitting room environments.

-- Comfortable fitting room lounges with flat-screen TVs, telephones and sofa banquettes.

-- Dramatic new visual presentation techniques including fashion-trend focuses at high traffic intersections and navigation signposts throughout the store.

-- Latest technology and conveniences including in-store computer Internet kiosks in Juniors departments that allow customers to check e-mail and local entertainment venues, as well as an average of 30 price-check stations located throughout the store.

-- High quality, convertible shopping carts at entrances and in Home departments, featuring child seats, mesh storage areas and hooks for merchandise or a handbag.

Other innovations being tested in various stores nationwide as part of the ongoing reinvent process include centralized and pass-through customer service areas, radio frequency phone systems, plasma TV screens, in-store childcare, customer refreshment venues and sit-down Internet stations.

Federated, with corporate offices in Cincinnati and New York, is one of the nation's leading department store retailers, with annual sales of more than $15.6 billion. Federated currently operates more than 460 stores in 34 states, Guam and Puerto Rico, under the names of Macy's, Bloomingdale's, The Bon Marche, Burdines, Goldsmith's, Lazarus and Rich's. The company also operates macys.com and Bloomingdale's By Mail.

                       FEDERATED REINVENT STORES
                             NEW LOCATIONS

DIVISION             LOCATION                  CITY/STATE

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MACY'S EAST          Newport Center            Jersey City, NJ
                     Mall at Millennia         Orlando, FL

MACY'S WEST          Westminster               Westminster, CA
                     Temecula                  Temecula, CA
                     Scottsdale                Scottsdale, AZ
                     Capitola                  Santa Cruz, CA

RICH'S               Peachtree                 Columbus, GA

BON MARCHE           Valley Mall               Yakima, WA


                       FEDERATED REINVENT STORES
                          EXISTING LOCATIONS

DIVISION             LOCATION                  CITY/STATE
----------------------------------------------------------------------

MACY'S EAST          Garden State              Paramus, NJ
                     Willowbrook               Wayne, NJ
                     Aventura                  Miami, FL
                     Cross County              Yonkers, NY
                     Roosevelt Field           Garden City, NY
                     Walt Whitman              Huntington Station, NY
                     Smith Haven               Lake Grove, NY
                     Burlington                Burlington, MA
                     Bridgewater               Bridgewater, NJ
                     Springfield               Springfield, PA

MACY'S WEST          Valley Fair               Santa Clara, CA
                     Stone Ridge               Pleasanton, CA
                     Sherman Oaks              Sherman Oaks, CA
                     Fashion Valley            San Diego, CA
                     Sun Valley                Concord, CA
                     Stanford                  Palo Alto, CA
                     Del Amo                   Torrance, CA
                     Glendale                  Glendale, CA
                     The Oaks                  Thousand Oaks, CA
                     Fashion Show              Las Vegas, NV
                     Mission Viejo             Mission Viejo, CA

RICH'S               Lenox                     Atlanta, GA
                     North Point               Atlanta, GA
                     Town Center               Kennesaw, GA

LAZARUS              Tuttle Crossing           Columbus, OH
                     Kenwood                   Cincinnati, OH

GOLDSMITH'S          Wolfchase                 Memphis, TN

THE BON MARCHE       Southcenter               Tukwila, WA
                     Columbia Center           Kennewick, WA
                     Bellevue                  Bellevue, WA

BURDINES             Fashion Square            Orlando, FL
                     West Shore                Tampa, FL
                     Westland                  Hialeah, FL
                     West Dade                 Miami, FL

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