Federated Department Stores
Federated Department Stores was an American department-store holding company that assembled regional retail chains before consolidating most of them under the Macy's name.
Last updated November 4, 2026
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Overview
Federated Department Stores was an American department-store holding company formed in 1929 by the owners of several established regional chains. Its original members were F&R Lazarus & Company of Columbus, Ohio, including its Cincinnati Shillito's division; Abraham & Straus of Brooklyn; and William Filene's Sons of Boston. Bloomingdale Brothers of New York joined in 1930. Rather than operate under a single consumer-facing name, Federated initially functioned as a federation of regional department-store businesses, preserving local identities while combining purchasing, management expertise, and financial resources. The company’s corporate ancestry reached back to F&R Lazarus & Company, founded in 1851. During the 1930s, Federated became associated with modern merchandising practices. Fred Lazarus Jr. promoted presenting garments by size while offering multiple styles, colors, and prices, a method influenced by European retail observations. He also advocated moving Thanksgiving to the fourth Thursday of November, extending the Christmas shopping period; Congress later made that arrangement permanent. The resulting holiday-shopping pattern helped make the day after Thanksgiving, later widely known as Black Friday, a major retail event. After moving its corporate offices to Cincinnati in 1945, Federated expanded through acquisitions and affiliations across the United States. Its portfolio included chains such as Rike Kumler, Burdines, Rich's, Foley's, Sanger-Harris, Boston Store, MainStreet, Bullock's, I. Magnin, Gold Circle, Richway, Stern's, and Liberty House. The company also entered supermarkets through its 1968 acquisition of Ralphs. Some chains were merged, divested, or converted as Federated adjusted its portfolio, and the resulting group combined full-line department stores with discount retail, specialty stores, supermarkets, and a private-label credit operation. Federated became the target of a highly leveraged takeover by Canadian developer Robert Campeau in 1988. It agreed to the approximately $6.6 billion transaction after a contested bidding process that also involved Macy's, then an independent rival. Campeau was unable to refinance the acquisition debt, and Federated entered bankruptcy in 1990. It emerged in 1992 as a reorganized public company, Federated Stores, Inc., and sold Ralphs as part of the restructuring. The post-bankruptcy company acquired the independently operated Macy's chain in 1994. It also bought Broadway Stores in 1995, adding California nameplates including The Broadway, Emporium-Capwell, and Weinstock's. During the late 1990s and early 2000s, Federated increasingly converted regional banners to Macy's, while retaining Bloomingdale's as its principal alternative brand. Project Hyphen added the Macy's name to many regional banners in 2003; Project Star subsequently removed the regional names altogether. The company also began selling merchandise online in 1998. In 2005, Federated agreed to acquire May Department Stores Company for $11 billion, while assuming roughly $6 billion of debt. The transaction, completed on August 30, 2005, created one of the largest department-store groups in the United States. It brought former Federated banners such as Foley's and Filene's back under the same corporate umbrella, but also required divestitures and extensive store conversions to address regulatory and competitive concerns. Lord & Taylor was sold in 2006, and the bridal and formalwear businesses acquired with May were also divested. In September 2006, most remaining May banners disappeared, with stores becoming Macy's or, in selected cases, Bloomingdale's. The shift from a federation of regional chains to a company centered on two national banners made the old name increasingly misleading. Shareholders approved a corporate name change in May 2007, and on June 1 the company became Macy's, Inc. Federated Department Stores therefore ceased to exist as the company’s legal and public identity, although…
History
Federated Department Stores was created in 1929 when the owners of F&R Lazarus & Company, Abraham & Straus, and William Filene's Sons combined their interests in a holding company. Lazarus traced its own origins to 1851 in Columbus, Ohio, while the other founding chains were major regional department-store businesses in Brooklyn and Boston. Bloomingdale Brothers joined in 1930, giving Federated an early presence in New York as well as the Midwest and New England. The federation model allowed the participating chains to preserve regional names and merchandising traditions while cooperating at the corporate level. Fred Lazarus Jr. helped establish a more systematic approach to apparel presentation by grouping garments by size and then offering variation in style, color, and price. He also promoted a later Thanksgiving date to lengthen the holiday selling season. The change became permanent through federal legislation in 1941 and contributed to the development of the modern Thanksgiving weekend retail cycle. Federated transferred its corporate offices to Cincinnati in 1945 and expanded during the second half of the twentieth century. Its acquisitions and operating divisions included Rike Kumler, Burdines, Rich's, Foley's, Sanger Brothers, A. Harris, Boston Store, MainStreet, Bullock's, I. Magnin, Gold Circle, Richway, and other regional chains. The company entered supermarkets by acquiring Ralphs in 1968 and added discount-store operations through Gold Circle and Richway. Some businesses were merged into existing divisions, while others were sold when the company changed strategic direction. The company’s most disruptive period began with Robert Campeau’s takeover attempt in 1988. After resisting the bid and attracting competing interest from Macy's, Federated accepted a transaction valued at approximately $6.6 billion. The highly leveraged deal could not be refinanced, and Federated entered bankruptcy in 1990. In 1992 it emerged as Federated Stores, Inc., with Ralphs sold to a buyer group led by Edward J. DeBartolo Corporation. Federated then pursued a strategy of consolidation. It acquired Macy's in 1994 and Broadway Stores in 1995, adding several California banners. In the late 1990s the group developed online sales operations and continued integrating its credit activities. Its regional-banner strategy gradually changed: many local names first received hyphenated Macy's identities in 2003, then became simply Macy's in 2004. Bloomingdale's remained the principal department-store banner outside the Macy's network. In 2005 Federated announced and completed the acquisition of May Department Stores. The deal included a substantial assumption of debt and created a national network exceeding one thousand stores before required divestitures and closures. Former Federated chains such as Foley's and Filene's returned to the corporate portfolio, while May banners including Famous-Barr, Hecht's, Kaufmann's, Marshall Field's, and Robinsons-May were largely converted to Macy's in 2006. Lord & Taylor and several specialty businesses were sold as part of the post-merger restructuring. By this point, the federation of regional nameplates had effectively become a Macy's- and Bloomingdale's-centered company. Shareholders approved a corporate name change in 2007, and Federated Department Stores became Macy's, Inc. on June 1. The Federated identity consequently became a historical corporate name rather than an active consumer brand. Macy's, Inc. later expanded beyond department stores, including through its 2015 acquisition of Bluemercury, but those developments belong to the successor company.
- 2007
Corporate name changes to Macy's, Inc.
[1]The Federated name is retired and the successor operates as Macy's, Inc.
- 2006
Regional banners disappear
[1]Most acquired May nameplates are converted to Macy's, while selected stores become Bloomingdale's.
- 2005
May Department Stores acquisition
[1]Federated completes its purchase of May Department Stores after regulatory discussions and announced divestiture commitments.
- 2001
Liberty House acquisition
[1]Federated acquires Liberty House as the Hawaiian chain exits Chapter 11.
- 1998
Online retail begins
[1]Federated begins selling merchandise online.
- 1995
Broadway Stores acquisition
[1]The company buys Broadway Stores and adds several California department-store banners.
- 1994
Macy's acquisition
[1]Federated acquires Macy's, then an independent department-store company.
- 1992
Emergence from bankruptcy
[1]The reorganized company emerges as Federated Stores, Inc.
- 1990
Bankruptcy filing
[1]Federated files for bankruptcy after the takeover debt cannot be refinanced.
- 1988
Campeau takeover closes
[1]Federated accepts Robert Campeau's leveraged takeover proposal after a contested bidding process.
Products and positioning
A multi-banner American department-store holding company that combined regional retail identities with centralized purchasing and operations, eventually transitioning toward national Macy's and Bloomingdale's branding.
Department stores · 1929
Regional department stores
Federated's principal business was a portfolio of full-line department-store chains serving regional markets. The stores sold apparel, accessories, cosmetics, home goods, jewelry, footwear, and seasonal merchandise. For much of the company's history, local banners such as Lazarus, Rich's, Burdines, Foley's, Filene's, and Bullock's remained visible to shoppers, even though purchasing and corporate functions were coordinated through Federated.
Discount department stores
Gold Circle and Richway
Gold Circle and Richway represented Federated's discount-store operations. The chains broadened the company's reach beyond traditional full-line department stores and served value-oriented shoppers with general merchandise, apparel, and household products. Gold Circle later absorbed Twin Fair locations after Federated acquired Twin Fair in 1982.
Consumer finance
FDS Bank credit cards
FDS Bank operated Federated's private-label consumer credit activities and issued or maintained much of the company's store-card portfolio. The credit business supported customer purchasing across the department-store network. Federated agreed to sell its combined proprietary credit-card business to Citigroup in connection with financing the May acquisition.
Department-store banners · 1994
Macy's and Bloomingdale's banners
Although Macy's and Bloomingdale's were consumer-facing banners rather than products in the conventional sense, they became Federated's central retail offering. Macy's absorbed most former regional nameplates during Project Hyphen and Project Star, while Bloomingdale's was used for selected higher-end locations and remained distinct after the 2006 conversions.
Controversies
1998
SEC settlement over debt-collection practices
Federated settled an SEC investigation concerning practices in which credit-card debtors were asked to sign repayment agreements connected with bankruptcy. The agreements were not properly filed with bankruptcy courts and therefore were not legally binding in the intended manner. The settlement was reported at $14.46 million.
Marketing campaigns
- 2006Macy's national conversion program
United States
Following the May merger, Federated converted numerous May banners, including Famous-Barr, Filene's, Foley's, Hecht's, Kaufmann's, Marshall Field's, Meier & Frank, Robinsons-May, and Strawbridge's, to Macy's or selected Bloomingdale's locations.
Outcome. The program created a substantially more nationally standardized store network but ended many historic regional identities.
- 2004Project Star
United States
Federated completed the next stage of its banner consolidation by removing most regional names from the hyphenated identities created the previous year.
Outcome. Most participating stores operated simply as Macy's, while Bloomingdale's remained separate.
- 2003Project Hyphen
United States
Federated added the Macy's name to many regional banners, producing identities such as Bon-Macy's, Goldsmith's-Macy's, Burdines-Macy's, and Rich's-Macy's. The initiative prepared customers and operations for a more unified national brand structure.
Outcome. The hyphenated names were largely replaced by the single Macy's name in 2004.
Brand decisions
2007
Retire the Federated corporate nameStrategyBackground
After years of converting regional stores to Macy's and retaining Bloomingdale's as the other principal banner, management concluded that the Federated name no longer described the operating model.
Action taken
Shareholders approved a change to Macy's, Inc., effective June 1, 2007.
Aftermath
Federated Department Stores ceased to operate as the public corporate identity, and the successor continued under the Macy's, Inc. name.
2005
Acquire May Department StoresM&ABackground
Federated sought greater national scale through May's large portfolio of regional department-store chains. The announced purchase price was $11 billion, with approximately $6 billion of May debt also assumed.
Action taken
Federated completed the acquisition on August 30, 2005, after reaching an assurance agreement with attorneys general from New York, California, Massachusetts, Maryland, and Pennsylvania.
Aftermath
The company sold or converted stores to satisfy competitive concerns, disposed of Lord & Taylor and specialty businesses, and converted most May banners to Macy's or Bloomingdale's in 2006.
Purchase price and assumed debt. $11 billion purchase price plus approximately $6 billion of assumed debt (2005)
1994
Acquire Macy'sM&ABackground
Macy's had entered bankruptcy in 1992, creating an opportunity for Federated to acquire a major former rival and a nationally recognizable retail name.
Action taken
Federated purchased Macy's in 1994.
Aftermath
Macy's became the foundation of Federated's later national-brand strategy and ultimately replaced the Federated corporate name.
1988
Accept Robert Campeau's takeover proposalM&ABackground
Federated faced a takeover campaign by Canadian developer Robert Campeau and competing bids that included Macy's. The proposed transaction was valued at approximately $6.6 billion and was financed with substantial leverage.
Action taken
Federated agreed to the acquisition in April 1988.
Aftermath
The debt burden could not be refinanced, leading to bankruptcy in 1990 and a later corporate reorganization.
Takeover value. Approximately $6.6 billion (1988)
- Macy's — Macy's submitted competing bids during the takeover contest and later acquired selected Federated assets.
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