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Federated / Footstar

From: ASAP

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CINCINNATI & WEST NYACK, N.Y., Jan 3, 2002-- Federated Department Stores, Inc. (NYSE:FD)(PCX:FD) and Footstar, Inc., today announced that Footstar's Meldisco division will begin operating Federated's licensed children's shoe departments effective July 1, 2002. The 46 children's shoe departments, currently operated by Stride Rite, will be redesigned with open-sell fixtures and will introduce Federated's new Greendog private brand of children's shoes. Federated and Meldisco anticipate opening as many as 175 children's shoe departments over the next three years.

"We are excited about the potential of the new children's shoe departments," said Terry Lundgren, president of Federated Department Stores. "Our customers will be able to easily access merchandise in an expanded, user-friendly environment and we will offer shoes that are specifically designed to complement our children's apparel in style, color and value. Both will enable us to significantly grow this important part of our business."

Federated and Meldisco will begin redesigning selling space in the children's shoe departments' in May, adding 100 percent open-sell merchandising fixtures that enable customers to select their own shoe sizes and minimize wait time. Sales associates will continue to assist customers and measure children's feet.

Mickey Robinson, Footstar's chairman and chief executive officer commented, "We are delighted to have the opportunity to add Federated Department Stores to our growing portfolio of licensed footwear departments. We can deliver the style, durability, price points and quality customers want, and we look forward to using our footwear expertise to serve Federated's customers."

Meldisco, the leading licensed footwear operator in the United States, will source and supply nationally recognized brands as well as high quality leather footwear through Footstar's Global Sourcing Organization.

When the new departments are unveiled in July, they will feature Federated's own private brand of children's shoes under the Greendog brand, in a range of styles from athletic to special occasion. Other brands offered are expected to include Tommy Hilfiger, Kenneth Cole, Stevies, Nike, Adidas, Elefanten, Rachel, Stride Rite, Tootsies, Keds and Sam & Libby. Shoes will be specifically designed and selected to complement children's apparel offerings.

Current children's shoe departments are located in Macy's, Goldsmith's, Lazarus and Rich's stores. Beginning in July, children's shoes will be added to most new department stores and remodels across the company, with additional store rollouts planned for the coming years.

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 $18.4 billion. Federated currently operates more than 450 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, as well as macys.com, Bloomingdale's By Mail and Fingerhut. More information on Federated and its operating divisions is available on the Internet at www.federated-fds.com.

Footstar, Inc. (NYSE:FTS) is a leading footwear retailer. The Company offers a broad assortment of branded athletic footwear and apparel through its two athletic concepts, Footaction and Just For Feet and their websites, www.footaction.com and www.justforfeet.com, and discount and family footwear through licensed footwear departments operated by Meldisco. As of November 24, 2001, the Company operated 523 Footaction stores in 42 states, Puerto Rico, and the U.S. Virgin Islands, 88 Just For Feet superstores located predominantly in the Southern half of the country and 6,776 Meldisco licensed footwear departments across the country.

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