Federated Names Anne MacDonald Chief Marketing Officer in Drive to Build Macy's Into a Leading Consumer Brand; Peter Sachse Named to New Role as Chairman/CEO of High-Growth macys.com Business

MacDonald succeeds Peter Sachse, who will fill a newly createdposition as chairman and chief executive officer of macys.com. Bothwill be based in New York and report directly to Terry J. Lundgren,Federated's chairman, president and chief executive officer.

"Anne MacDonald's mission will be to lead us outside of thetraditional realm of retail store marketing and to establish Macy's asa leading American consumer brand," Lundgren said. "Her track recordwith iconic brands will help take Macy's to the next level ofstrategic marketing insight and innovation at this historic point inthe company's history."

Lundgren noted that Macy's will have a truly national presence forthe first time this fall, when about 400 May Company store locationsacquired in 2005 convert to the Macy's nameplate. At that point,Macy's will operate more than 800 department stores in 45 states, theDistrict of Columbia, Puerto Rico and Guam. It will be a premiernational retailer, with a focus on providing customers with affordableluxury.

"We are building Macy's marketing and branding acumen from aposition of strength thanks to Peter Sachse's success over the lastthree years in launching Macy's Corporate Marketing and establishing acoordinated approach to advertising and sales promotion across thecompany," Lundgren added.

MacDonald will join Federated from Citibank, where she serves aschief marketing officer for Citi's Global Consumer Group. Previously,she was vice president for brand management at Pizza Hut, Inc., aDallas-based division of PepsiCo. In earlier account management roleswith N.W. Ayer, Inc. and Grey Advertising, MacDonald worked withclients including Procter & Gamble, AT&T and Citicorp. Immediatelyprior to joining Pizza Hut in 1993, she was Ayer's executive vicepresident and managing director on its Procter & Gamble business.

MacDonald, 50, joined Citibank in October 1997 as managingdirector for global branding and communications. She served asmanaging director for global marketing consumer needs before beingpromoted to chief marketing officer for the consumer group in December2004. MacDonald, a native of Denville, NJ, holds bachelor's degree ineducation from Boston College and an MBA from Bath University inEngland. She lives in New York City.

In the new position as chairman of macys.com, Sachse will haveoverall responsibility for the Macy's brand's online business andreinforce the integration of the Macy's stores and online site. Sachsewill remain responsible for the administration of marketing activitiesthrough a period of management transition.

Kent Anderson, president of macys.com, will report to Sachse andwork in close partnership with him. Oversight of macys.com willtransition to Sachse from Michael J. Osborn, who recently was namedpresident and chief operating officer of the Macy's Home Storedivision and who will concentrate full-time on his responsibilitiesrelated to growing sales at the home store.

Federated announced last month that it plans to investapproximately $130 million in capital over the next two years ininfrastructure improvements and service enhancements to supportcontinued growth of its direct-to-consumer businesses. Thesebusinesses are expected to grow to more than $750 million in annualsales by 2008 from about $450 million in 2005.

"Macy's emergence as a national brand will create newopportunities for our direct-to-consumer business," Lundgren said."Working with Kent Anderson, Peter will provide additional focusedleadership as we significantly increase our online sales volume, aswell as the customer service and fulfillment infrastructure, over thenext several years."

Sachse, 48, has served as president of Macy's Corporate Marketingsince June 2003. Previously, he was president and chief operatingofficer of the company's The Bon Marche division (now Macy'sNorthwest). Sachse began his retail career with Macy's in Kansas Cityin 1980. He was named division merchandise manager at Macy's Bullock'sdivision in 1987 and in 1992 moved to The Bon Marche as senior vicepresident/general merchandising manager. In 1997, Sachse was namedexecutive vice president/general merchandise manager at Macy's East inNew York where, in 1999, he was promoted to vice chair/director ofstores. A native of Sheboygan, WI, Sachse is a finance graduate of theUniversity of Wisconsin. Sachse lives with his wife, Jini, and twochildren in Purchase, NY.

Federated, with corporate offices in Cincinnati and New York, isone of the nation's premier retailers, with fiscal 2006 sales expectedto be more than $27 billion. Federated operates more than 850department stores and more than 720 bridal and formalwear stores in 49states, the District of Columbia, Guam and Puerto Rico under the namesof Macy's, Bloomingdale's, Famous-Barr, Filene's, Foley's, Hecht's,Kaufmann's, Lord & Taylor, L.S. Ayres, Marshall Field's, Meier &Frank, Robinsons-May, Strawbridge's, The Jones Store, David's Bridal,After Hours Formalwear and Priscilla of Boston. The company alsooperates macys.com and Bloomingdale's By Mail.

(NOTE: Additional information on Federated, including past newsreleases, is available at www.fds.com/pressroom.)