Federated OKs plan to take Macy's name

0 Comments | Deseret News (Salt Lake City), May 19, 2007 | by Cotten Timberlake Bloomberg News

Federated Department Stores Inc. shareholders approved a plan to change the company's name to Macy's Inc.

Stockholders voted to adopt the name at Federated's annual meeting in Cincinnati Friday, nine months after it doubled the number of Macy's locations to more than 800. The company, the second- biggest U.S. department-store chain, will become Macy's on June 1, General Counsel Dennis Broderick said.

Federated, which bought May Department Stores Co. in 2005, plans to increase television advertising and promotions to draw the May shoppers. Chief Executive Officer Terry Lundgren said Federated will restore promotions to their former levels.

"The most important thing is to get sales moving in the former May locations, and I am prepared to spend money to do that," he told a group of reporters after the company's annual meeting. "We are going to slow the rate of change in the fall season so we can get the consumer gradually weaned off them."

He declined to quantify the promotions.

The company is still aiming to reduce promotions long-term so that all Macy's stores operate on the same calendar for discounts, he said. Federated says increasing the promotions should generate traffic and boost sales.

On May 16, Lundgren said sales at the former May stores were "disappointing."

The name change "will increase awareness of Macy's, which represents 90 percent of our business," Lundgren told investors Friday. The company also owns the Bloomingdale's chain.

Shares of Federated, which will start trading on the New York Stock Exchange under the symbol "M" in June, rose 64 cents to $39.70 Friday. They increased 15 percent last year, less than half the 39 percent gain for J.C. Penney Co.

The company was founded under the Federated name in 1929.