Macy's 2009 Annual Report Download - page 8

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• risks associated with the possible inability of the Company’s manufacturers to deliver products in a
timely manner or meet the Company’s quality standards;
• risks associated with the Company’s reliance on foreign sources of production, including risks related
to the disruption of imports by labor disputes, regional health pandemics, and regional political and
economic conditions;
• risks related to duties, taxes, other charges and quotas on imports; and
• risks associated with possible systems failures and/or security breaches, including, any security breach
that results in the theft, transfer or unauthorized disclosure of customer, employee or company
information, or the failure to comply with various laws applicable to the Company in the event of such
a breach.
In addition to any risks and uncertainties specifically identified in the text surrounding such forward-
looking statements, the statements in the immediately preceding sentence and the statements under captions such
as “Risk Factors” and “Special Considerations” in reports, statements and information filed by the Company
with the SEC from time to time constitute cautionary statements identifying important factors that could cause
actual amounts, results, events and circumstances to differ materially from those expressed in or implied by such
forward-looking statements.
Item 1. Business.
General. The Company is a corporation organized under the laws of the State of Delaware in 1985. The
Company and its predecessors have been operating department stores since 1830. On June 1, 2007, the Company
changed its corporate name from Federated Department Stores, Inc. to Macy’s, Inc. and the Company’s shares
began trading under the ticker symbol “M” on the New York Stock Exchange (“NYSE”).
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”). In connection with the sale of these assets, the
Company and Citibank entered into a long-term marketing and servicing alliance pursuant to the terms of a
Credit Card Program Agreement (the “Program Agreement”) with an initial term of ten years expiring on
July 17, 2016 and, unless terminated by either party as of the expiration of the initial term, an additional renewal
term of three years. The Program Agreement provides for, among other things, (i) the ownership by Citibank of
the accounts purchased by Citibank pursuant to the Purchase Agreement, (ii) the ownership by Citibank of new
accounts opened by the Company’s customers, (iii) the provision of credit by Citibank to the holders of the credit
cards associated with the foregoing accounts, (iv) the servicing of the foregoing accounts, and (v) the allocation
between Citibank and the Company of the economic benefits and burdens associated with the foregoing and
other aspects of the alliance.
On August 30, 2005, upon the completion of the Merger, the Company acquired May’s approximately 500
department stores and approximately 800 bridal and formalwear stores. Most of the acquired May department
stores were converted to the Macy’s nameplate in September 2006, resulting in a national retailer with stores in
almost all major markets. The operations of the acquired Lord & Taylor division and the bridal group (consisting
of David’s Bridal, After Hours Formalwear and Priscilla of Boston) have been divested and are presented as
discontinued operations. As of January 30, 2010, the operations of the Company included 850 stores in 45 states,
the District of Columbia, Guam and Puerto Rico under the names “Macy’s” and “Bloomingdale’s” as well as
macys.com and bloomingdales.com.
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