January 25, 2006, 12:00 AM

Federated plans major upgrade to Macy’s and Bloomingdale’s web sites

Federated Department Stores Inc. plans to invest $130 million in infrastructure improvements and service enhancements to its direct-to-consumer businesses, including Macys.com and Bloomingdales.com, Federated said today.

Federated Department Stores Inc. plans to invest $130 million in infrastructure improvements and service enhancements to its direct-to-consumer businesses, including Macys.com, Bloomingdales.com, MacysWeddingChannel.com and BloomingdalesWeddingChannel.com, over the next two years, the company said today.

“Online sales represent the fastest-growing part of our business and an outstanding opportunity for continued progress as we serve millions of new customers nationwide through our acquisition of May Co.,” said Terry J. Lundgren, Federated’s chairman, president and CEO. “Our customers have told us they appreciate the convenience of shopping online as well as in our stores. This cross-channel integration is a vital component of our ability to maximize the potential of the nationwide Macy’s and Bloomingdale’s brands.”

Federated in January announced it was consolidating all of its e-commerce operations under the Macys.com and Bloomingdales.com brands by September.

Federated expects direct-to-consumer sales, including Bloomingdale’s By Mail, to grow to more than $750 million by 2008 from about $450 million last year.

As part of the plan, Federated will be upgrading and enhancing content and order management software systems supporting Internet-based selling functions. The systems will help handle increased traffic and orders as well as improve service levels, enhance efficiency, and enable increased personalization of gift packages, Federated said. The upgraded systems also will give customers more detailed information on order status and delivery schedules.

Federated also plans to build a 595,000-square-foot distribution center specifically to handle direct-to-consumer orders and supported by a tailored warehouse-management system. Groundbreaking on the warehouse in Portland, Tenn., is expected in February, with completion in spring 2007.

Federated currently fulfills online orders from several Federated distribution centers that primarily supply the company’s stores.

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