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Federated pares down Internet biz

Federated will narrow its Internet businesses, eliminating the commerce portion of bloomingdales.com and redirecting online resources to macys.com, which will undergo additional changes. The home segment, one of the more successful online categories, will continue to increase in the existing categories of bedding and bath.

About 100 people will be laid off as a result of the changes expected to be completed by February.

"Over the past three years, Federated has been aggressively pursuing strategies to capitalize on two of the strongest names in retail — Macy's and Bloomingdale's," said James Zimmerman, Federated's chairman and ceo. "We are pleased with our progress, and we have learned a lot in that process as a result of the efforts of a number of very talented, dedicated people in the direct-to-customer part of our business. We remain committed to pursuing our Internet strategies."

At macys.com, categories such as petites, larger sizes, career and swimwear will be eliminated, while the popular areas of home, bridal, gifts and jewelry will expand. In addition, the Macy's catalog operation, which primarily served as a marketing vehicle for macys.com, will cease operations entirely.

The home furnishings businesses have been the fastest growing piece of the macys.com business, said Helaine Suval, senior vp, gmm, macys.com, and this year the online retailer dramatically expanded the assortment in home textiles, tabletop and housewares. "We expect to be able to leverage those assortments even more successfully next year," she said. The growth will come from the businesses already built on the site, she said, and not in new categories, though the assortments continue to be refined.

The home textiles business will continue to be driven by designer brands and the Charter Club brand from Macy's, with comprehensive assortments in bedding and bath, Suval said. In addition, the bridal business will continue to grow online through the Wedding Channel, with increased assortments and a spike in the home textiles and housewares area, along with refined tabletop and gift assortments.

The bloomingdales.com site will transition from an online e-commerce site to primarily a marketing site that supports the Bloomingdale's store brand. Online services of the bloomingdales.com bridal registry will be maintained in partnership with WeddingChannel.com, and the site will continue to offer electronic order forms for purchasing from the Bloomingdale's By Mail catalog.

"In the current economic climate, it is important that we use our available resources in the most productive way possible," said Jeffrey Sherman, chairman of Federated Direct, the company's direct-to-customer division headquartered in New York.

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