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R.H. MACY REPORTS EARNINGS

                   R.H. MACY REPORTS EARNINGS
    NEW YORK, Nov. 1 /PRNewswire/ -- R.H. Macy & Co. Inc. today issued


the following from its 10K report:
    Enclosed is a copy of our 10-K for the fiscal year ended Aug. 3, 1991.
    In a difficult economic climate, we made meaningful progress on a number of important fronts.  We reduced the face amount of our debt by approximately $2 billion, lowered our inventory and shortage levels, and put in place programs to stimulate the consumer and build store traffic.
    Considering our efforts, the results for the year were disappointing to us.  Like most major retailers, we were impacted by the continued sluggish economy, particularly in the Northeast, and the effects of the war in the Persian Gulf.  As you review our results, it is important to note that direct comparisons with the past are not easy due to the significant effect the sale of our credit care operations had on certain expense items and on EBIT-D.
    By significantly reducing our debt in fiscal 1991, we cut our cash interest requirements by an annual rate of $213 million and non-cash interest by $35 million.  We did so by selling our credit card operations to GE Capital; raising more than $200 million of equity from both current and new investors, the proceeds of which were used to buy back over $550 million face amount of our subordinated debt; and selling or refinancing certain non-operating (principally real estate) assets, the proceeds of which were applied to Macy's term loan.  The result of these actions is that our December term loan payment has been reduced to $35 million, following which only $170 million will remain on that loan, down from $438 million 15 months ago.  Having made substantial progress in improving our capital structure, Macy's remains a company with a high level of debt and will continue to explore alternatives to reduce debt and interest expense.
    At the same time, we are concentrating on improving our market share and introducing state-of-the-art technology for the placement and reordering of merchandise.
    As you know, we have launched a major television advertising campaign, which so far has had encouraging results.  We've also had success with our credit promotion programs and look for on-going benefits as GE Capital assists in aggressive credit promotions.
    Our new marketing programs are already starting to have their intended effect.  Our fourth quarter showed a reversal in our sales trend, with comparable store sales rising slightly, following substantial declines in each of the first three quarters.  This reversal has continued into the new fiscal year.  Comparable store sales rose 1.7 percent in August and 4.2 percent in September.  We expect October to show a continuation of this positive trend.
    While we are pleased that the sales trend has been reversed, we do not think it represents a fundamental shift in consumer confidence. We are not expecting an especially buoyant Christmas season and are managing inventories and expenses to protect margins in our second quarter.
    As part of our plan to keep inventories clean, we have formed a new division, Macy's Close-Out (MCO), which will operate clearance stores in free-standing or outlet mall locations.  Initially we plan to open five such stores across the nation.  The first will open this month at Sawgrass Mills in Southern Florida.
    In late August, we announced plans for an organizational realignment, intended to take full advantage of our merchandising strengths.  Beginning this February, we will operate two regional department store divisions, instead of the current three: Macy's East, with 68 stores and annual sales of $3.7 billion; and Macy's West, with 52 stores and annual sales of $2.6 billion.  (I. Magnin will not be affected by this change).  As part of the realignment, a number of executives will be named to new positions, including several presidents within each division, to oversee merchandising and other functions.
    By realigning our organization and redeploying our management team, we are positioning Macy's for the future.  Our two large department store divisions will enjoy efficiencies from centralization.  At the same time, we are investing in a new planning and distribution function to better allocate merchandise to meet customer needs.  We will continue to encourage individual initiative in each store and will augment the central buying organization with regional buying in certain key markets. The result will be aggressive merchandising professionals in buying, planning and store merchandising management, working to keep each store properly stocked and an exciting attraction for customers.
    In mid-August we opened a new 250,000 square-foot store in Springfield, Va., our third store in the Washington, D.C. market. Next August, we will open a new Macy's in the Mall of America outside Minneapolis and in September a new Bullock's will open in Burbank, Calif.  In addition, we recently announced plans to build a new Macy's in downtown Denver and new store in Freehold, N.J., as part of the five- year, eleven-store expansion program we announced last spring.
    With our marketing programs beginning to take hold, and our realignment promising to make us an even more effective organization, we are putting the elements in place to fully capitalize on our strong franchise.  Our positioning as a family department store, offering a wide assortment of fashion merchandise and value to the customer, is well suited to the current climate.  As economic conditions improve, we expect Macy's to benefit accordingly.
    We will continue to keep you apprised of our progress.
       R. H. MACY & CO., INC. AND CONSOLIDATED SUBSIDIARIES
               CONSOLIDATED STATEMENT OF OPERATIONS
            (Dollars in thousands, except per share)
      Years ended                       8/3/91     7/28/90     7/29/89
                                     (53 weeks)   (52 weeks)  (52 weeks)
    Net retail sales (including
     licensed departments)          $6,761,633   $7,266,772  $6,974,141
    Less:
    Cost of goods sold, including
     occupancy and buying costs      4,676,490    5,127,433   4,692,501
    Selling, general and
     administrative expenses         1,810,708    1,716,277   1,633,137
    Operating profit                   274,435      423,062     648,503
    Other expenses:
     Interest expense - net            637,717      716,751     695,577
     Unusual items - net                  (275)       --           --
    Loss before income taxes/
     (benefit), extraordinary
     gain/(charge) and cumulative
     effect of a change
     in accounting                    (363,007)   (293,689)     (47,074)
    Income taxes/(benefit)            (100,365)    (78,411)      15,935
    Net loss before extraordinary
     gain/(charge) and cumulative
     effect of a change in accounting (262,642)   (215,278)     (63,009)
    Extraordinary gain/(charge)
     (net of income tax expense/
     (benefit) of $68,920 and ($5,257)
     in 1991 and 1989)                 112,449       --          (7,885)
    Cumulative effect of a change
     in accounting for capitalization
     of inventory costs, net of income
     tax of $11,495                       --         --          17,243
    Net loss                          (150,193)   (215,278)     (53,651)
    Net loss per share:
     Net loss before extraord.
     gain/ (charge) and change
     in accounting                    (181.47)     (146.81)      (52.47)
     Extraord. gain/(charge), net       68.82         --          (4.73)
     Cumulative effect of a change
     in accounting, net                  --           --          10.34
    Net loss                          (112.65)     (146.81)      (46.86)
    -0-            11/1/91
    /CONTACT:  Jim Fingeroth or Michael Freitag of Kekst & Company, 212-593-2655, for Macy's/ CO:  R.H. Macy & Co. Inc. ST:  New York IN:  REA SU:  ERN JT-OC -- NY031 -- 0246 11/01/91 13:12 EST
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Date:Nov 1, 1991
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150 years of Macy's: you've come a long way, baby.

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