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Federated brings home new Bloomies store plan

CINCINNATI — Although Federated's home departments are among those suffering more heavily during the economic slowdown, the company has great ambitions for home, both in the United States and as part of an international brand expansion.

In a wide-ranging discussion following last week's annual shareholder meeting, Federated chairman and ceo James Zimmerman and president and chief merchandising officer Terry Lundgren outlined several upcoming initiatives for home.

In the United States, Federated sees opportunities to expand the new Bloomingdale's Home Store, as part of the nationwide expansion of the Bloomingdale's nameplate.

"The most unique part of Bloomingdale's assortment is home," said Zimmerman, adding that both small- and large-ticket items are included in that assessment.

In 2002, the company will open a 130,000-square-foot Bloomingdale's Home Store in downtown Chicago, although Lundgren said the location is somewhat contrary to the company's suburban market strategy going forward.

"That's going to be a powerful magnet for the home customer," he said.

Zimmerman added that the company will also open a Bloomingdale's Home Store in the Las Vegas area in 2002.

Lundgren and Zimmerman also discussed home as it relates to the company's "small-store strategy." The recent initiative calls for the opening of smaller-than-usual versions of its nameplate stores, such as the 100,000-square-foot Macy's that opened last fall in West Palm Beach, FL. The second aspect of the strategy includes other small-format "fill-in" stores to be dropped into markets that already have a large nameplate store presence. In such cases, home is one of the first departments to be cut back.

However, according to Zimmerman, if the smaller store is the only one in a given market, it will carry the full assortment, except furniture.

"We don't like doing the stores without home; it's important for marketing and it populates the store," said Zimmerman.

Federated is also testing a more customer-friendly, convenience-oriented format with its new 65,000-square-foot The Bon Marche opening later this year in Helena, MT.

The store will have a single entrance, centralized sales areas and specifically designed shopping carts - almost a true upscale interpretation of Kohl's.

"The customer likes Kohl's for a lot of reasons. Department store price points and Kohl's price points have some overlap. There's no reason why we couldn't do what Kohl's does at a department store-level," said Zimmerman.

Lundgren emphasized that the "small-store strategy" is not meant to supplant the department store business for Federated.

"Make no mistake — it's not an 'instead of' strategy; it's an 'addition to' strategy," he said.

On the international front, Lundgren identified Charter Club as a brand that could follow the lead of its INC private-label, women's casual brand. This spring, high-volume INC departments opened in Japan as part of a licensing agreement signed with a leading Japanese trading company.

Lundgren expects 30 INC departments to be up and running within two years. Last month, Federated opened its first and only INC freestanding department store in Tokyo. What gives Charter Club the potential for a similar global extension is its high profile within Federated's assortment.

"Charter Club is our largest brand in the store, it's even bigger than Liz Claiborne," said Lundgren. In other news, Federated announced that James Amann has been appointed executive vp, strategic initiatives, effective immediately. According to both Lundgren and Zimmerman, he will oversee merchandising systems development, credit privacy, technology investment, loyalty programs and customer-centric focus.

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