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Bear Sterns broadens retail coverage

New York — Bear, Stearns & Co. today initiated coverage of J.C. Penney Inc., May Department Stores, Federated Department Stores, Sears, Target Corp., Wal-Mart and Kohl's after the recent expansion of its retail team.

Associate director Christine Augustine noted that retail sales could remain weak through the 2002 holiday season, predicting the retailers with a heavy emphasis on apparel are likely to be hardest hit.

Among department stores, Federated is well positioned to lead consolidation in the industry, Augustine said. "Federated is likely to remain one of the industry's most energetic consolidators," said Augustine, who added that Federated's cost discipline should also help it to continue to gain market share.

Initial ratings from Bear Stearns of "peer perform" were assigned to Penney, May, Target and Wal-Mart. Federated and Kohl's were rated "outperform." Sears was rated "underperform."