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Federated & Hudson's Bay Agreement

From: ASAP

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Federated Department Stores, Inc. (NYSE:FD)(PCX:FD), today announced its New York-based Federated Merchandising Group (FMG) division has signed an agreement with Hudson's Bay Company to supply the Company's department store retail division, the Bay, with FMG's well-known private brand merchandise.

The Bay will begin carrying a broad range of Federated brands this fall - including I.N.C. International Concepts and Style & co. women's apparel; Clubroom and Tasso Elba apparel for men; and Tools of the Trade and selected Charter Club home merchandise.

With 100 store locations, the Bay is a Canadian brand icon and Canada's style leader. FMG expects that by year-end a broad selection of its merchandise will be available in more than 80 Bay stores. This new agreement builds on FMG's success in Japan, Australia, South America and Bermuda, where FMG brands are now sold in a total of 100 international locations.

"As the world marketplace becomes increasingly smaller, Federated continues to develop strategic alliances with non-competing retailers to leverage our investment in private brand development, as well as to strengthen the brand names through international exposure," said FMG President Leonard Marcus. "In doing so, we are uniquely able to provide leading department stores with high quality, trend-setting merchandise exclusive to their markets without the significant cost associated with their development."

In supplying international markets, all Federated private brand merchandise conforms to local legal and regulatory requirements, as well as preferences for style, size and color - within the overall brand identity and graphic and merchandising standards. The result is a turnkey opportunity for well-established department stores to enhance sales and margins. Merchandise sold under Federated's private brand names is concepted, designed, sourced and marketed by FMG.

"Federated will continue to be aggressive in pursuing strategies for partnering with retailers around the globe in the coming years," said Susan Bertelsen, FMG's senior vice president for new business development. "Our brands succeed in the U.S. - as well as worldwide - because we deliver fashion at an authentic value for the customer. FMG offers genuinely differentiated merchandise that drives traffic and builds loyalty for a store."

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.

The Bay is the department store retail division of Hudson's Bay Company with 100 stores from coast to coast. Hudson's Bay Company, established in 1670, is Canada's largest department store retailer and oldest corporation. The Company provides Canadians with the widest selection of goods and services available through retail channels that include more than 500 stores led by the Bay and Zellers chains. Hudson's Bay Company employs 70,000 associates and has operations in every province in Canada.

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