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Federated Department Stores & Tarrant Apparel Group Announce Multi-Year Exclusive Distribution Agreement

From: ASAP

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Federated Department Stores, Inc. (NYSE:FD - News) and Tarrant Apparel Group (Nasdaq:TAGS - News) today announced the formation of a multi-year exclusive distribution agreement to distribute American Rag CIE, a new casual sportswear collection for juniors and young men's. Beginning in August, the American Rag collection will be available in approximately 100 select Macy's, The Bon Marche, Burdines, Goldsmith's, Lazarus and Rich's-Macy's locations.

Leonard Marcus, president and chief operating officer of the Federated Merchandising Group (FMG), the sourcing arm of Federated, Gerard Guez, chairman and chief executive officer, and Todd Kay, vice chairman and president, of Tarrant, announced a partnership between FMG and Private Brands, Inc., a newly formed, wholly-owned subsidiary of Tarrant. Through this partnership, Private Brands will design and manufacture a full collection of American Rag merchandise, which will be distributed by FMG exclusively to Federated stores across the country. The launch of American Rag will be supported with in-store displays and a national marketing campaign beginning in August.

Created by Mark Werts, American Rag opened its first multi-brand and vintage clothing store in San Francisco in 1984, followed by the flagship store on La Brea Avenue in Los Angeles in 1985. The store quickly became a destination for celebrities and customers looking for vintage pieces and unique looks. Private Brands licenses certain exclusive rights to the American Rag trademark and has partnered with Federated to exclusively distribute this new collection in order to build upon the success of the brand.

According to Federated Vice Chair and FMG Chairman/CEO Janet Grove, "We believe American Rag will be a great success, allowing us to reach the 18 - 25 year old junior and young men's customer who is looking for a fresh take on sportswear with vintage inspired themes. We will be utilizing the American Rag La Brea location as a test store to create a collection that will be what our customer is looking for now."

"The American Rag brand has tremendous equity and strong potential for growth," said Guez. "We are committed to enhancing the brand and expanding the distribution, so Federated is the ideal retail partner to help us achieve our objectives."

The American Rag collection for juniors and young men's will be grounded in a denim based collection with vintage styling. Tops, tees and woven shirts, as well as related outerwear, will complete the collection. In select Federated stores, American Rag will feature one of a kind vintage items to enhance the brand.

"Offering exclusive product is one of the cornerstones of Federated's successful reinvent strategy - whether through merchandise we develop ourselves, or product we offer in partnership with others," said Terry J. Lundgren, Federated's president and CEO. "Our customers look to us to provide the latest fashion, and exciting collections, such as American Rag, offer the uniqueness that juniors and young men demand."

About Federated Department Stores, Inc.

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 $15.4 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-Macy's, as well as macys.com and Bloomingdale's By Mail. Information on Federated and its operating divisions is available on the Internet at www.fds.com.

About Tarrant Apparel Group

Tarrant Apparel Group is a leading provider of private label and branded casual apparel. The Company serves specialty retailers, mass merchants/national department stores and branded wholesalers by designing, merchandising, sourcing, and manufacturing casual apparel, for women, men and children. Through its subsidiary Private Brands, Inc., the Company designs, markets and manufactures its private brands for global distribution to leading retailers.

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