Macy's 2008 Annual Report Download - page 9

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into 69 geographic districts that will average 10-12 stores each. The 69 Macy’s districts will be grouped into
eight regions that will be based in the Chicago, Houston, Miami, Los Angeles, New York, Pittsburgh, San
Francisco and Washington, D.C. areas. Each region will include an organization of 35 to 40 executives to oversee
merchandising, planning and various support operations. Special events and marketing public relations staff also
will be located regionally. The new organization structure is expected to be in place beginning in the second
quarter of 2009.
The Company’s retail stores and Internet websites sell a wide range of merchandise, including men’s,
women’s and children’s apparel and accessories, cosmetics, home furnishings and other consumer goods. The
specific assortments vary by size of store, merchandising character and character of customers in the trade areas.
Most stores are located at urban or suburban sites, principally in densely populated areas across the United
States.
For 2008, 2007 and 2006, the following merchandise constituted the following percentages of sales:
2008 2007 2006
Feminine Accessories, Intimate Apparel, Shoes and Cosmetics ........................ 36% 36% 35%
Feminine Apparel ........................................................... 27 27 28
Men’s and Children’s ........................................................ 22 22 22
Home/Miscellaneous ......................................................... 15 15 15
100% 100% 100%
In 2008, the Company provided various support functions to its retail operations on an integrated, company-
wide basis.
• The Company’s subsidiary, FDS Bank, and its financial, administrative and credit services subsidiary,
Macy’s Credit and Customer Service, Inc. (“MCCS”), provide credit processing, certain collections,
customer service and credit marketing services in respect of all proprietary and non-proprietary credit
card accounts that are owned either by Department Stores National Bank (“DSNB”), a subsidiary of
Citibank, N.A., or FDS Bank and that constitute a part of the credit programs of the Company’s retail
operations. In addition, MCCS provides payroll and benefits services to all of the Company’s
operations.
As previously reported, on June 1, 2005, the Company and certain of its subsidiaries entered into a
Purchase, Sale and Servicing Transfer Agreement (the “Purchase Agreement”) with Citibank, N.A.
(together with its subsidiaries, as applicable, “Citibank”). The Purchase Agreement provided for,
among other things, the purchase by Citibank of substantially all of (i) the credit card accounts and
related receivables owned by FDS Bank, (ii) the “Macy’s” credit card accounts and related receivables
owned by GE Money Bank, immediately upon the purchase by the Company of such accounts from GE
Money Bank, and (iii) the proprietary credit card accounts and related receivables owned by May
(collectively, the “Credit Assets”). Various arrangements between the Company and Citibank in
respect of the Credit Assets are set forth in a credit card program agreement, including arrangements
relating to the servicing of the Credit Assets by FDS Bank and MCCS.
• Macy’s Systems and Technology, Inc. (“MST”), a wholly-owned indirect subsidiary of the Company,
provides operational electronic data processing and management information services to all of the
Company’s operations.
• Macy’s Merchandising Group, Inc. (“MMG”), a wholly-owned direct subsidiary of the Company, is
responsible for all of the private label development for the Company’s Macy’s branded operations.
During 2008, MMG also helped the Company to centrally develop and execute consistent merchandise
strategies while retaining the ability to tailor merchandise assortments and strategies to the particular
character and customer base of the Company’s various department store markets. Under the
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