Macy's 2005 Annual Report Download - page 6

page two
“Federated not only is larger today,
but we’re also more focused, more creative and more attuned to serving
the needs of our core customers, market by market.”
TERRY J. LUNDGREN
Chairman, President &
Chief Executive Officer
By virtually any measure, 2005 will be remembered as an
extraordinary year in the history of our company:
• We initiated and completed the acquisition of The
May Department Stores Company in a move that nearly
doubled the size of Federated. The acquisition included
nearly 500 outstanding store locations operated under
regional nameplates, including Famous-Barr, Filene’s, Foley’s,
Hecht’s, Kaufmann’s, Lord & Taylor, L.S. Ayres, Marshall Field’s,
Meier & Frank, Robinsons-May, Strawbridge’s and The Jones
Store, as well as a group of bridal and formalwear specialty
stores across the country.
• We refocused our business on two exceptional national brands
– Macy’s and Bloomingdale’s. More than 400 May Company
stores will be converted to these nameplates in September
2006, and about 80 duplicate locations are being divested.
We also announced plans to divest Lord & Taylor and the Bridal
Group in 2006. Through the conversions, Macy’s will grow to
more than 800 locations and Bloomingdale’s will add at least
four new locations.
• We also entered into a strategic alliance with Citigroup by
selling Federated’s proprietary and co-branded Visa credit
card receivables to Citigroup. The sale involves multiple
transactions to be completed by the third quarter of 2006.
Included are Federated and May Company proprietary and
Visa receivables.
• We achieved measurable progress on our four strategic
priorities – assortments, price simplification, improving the
shopping experience and marketing. Movement on each
priority is described in more detail on pages 4-9 of this report.
Federated not only is larger today, but we’re also more focused,
more creative and more attuned to serving the needs of our
core customers, market by market. We are an industry leader
with an opportunity to reshape how fashion is delivered to the
American consumer.
Clearly, we are in the process of creating something that
does not exist – a premier fashion retailer with strong national
brands and regional buying and decision-making that’s right
for the customers of each individual store. This is how we
put customers first, and how we will maximize value to
our shareholders.
May Company Integration
Integrating two retailers of the size and scope of Federated
and May Company is a significant undertaking. Fortunately,
Federated will benefit from the company’s experience in
successfully integrating other acquisitions over the past dozen
years, including Macy’s, Broadway Stores and Liberty House.
Dear Fellow Shareholder: