By  on January 20, 2006

NEW YORK — Federated Department Stores said Thursday that it will close five of 31 distribution centers this year, affecting 750 workers, as the retailer consolidates after the acquisition of May Department Stores.

Federated also is selling about 80 May stores as well as the Lord & Taylor division formerly owned by May. The bulk of the May stores are being converted to Federated's Macy's division. Some also could be converted to the Bloomingdale's division.

The facilities to be shut are in Portland, Ore., affecting 250 employees; Baltimore, 200 employees; Aurora, Colo.; 150 employees; Manchester, Conn., 120 employees, and Salt Lake City, 30 employees.

"Advances in logistics and distribution center technology allow us to handle a larger volume of goods more effectively with fewer facilities that are more regional in nature," Federated vice chairman Tom Cole said in a statement.

The company will try to relocate employees to other Federated facilities. Severance packages will be provided to workers who lose their jobs.

Federated has said it expects to realize about $175 million in cost synergies in 2006 and $450 million next year and beyond as a result of the May merger.

Expenses associated with the consolidations are included in the previously announced estimate of $1 billion in onetime costs spread over three years beginning in 2005.

Federated shares went up 33 cents on Thursday to close at $71.92 in New York Stock Exchange trading.

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