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FEDERATED’S 1Q SALES UP, MAY’S DOWN

BY BRANNON BOSWELL

First-quarter sales results indicate that May Department Stores Co. may be in need of a little private-label advice from its betrothed, Federated Department Stores. St. Louis-based May reported a 5.1 percent decline in same-store sales for the period, and it blamed the drop on slow sales of its in-house labels.

May had to steeply discount its private-label apparel ($18 million worth of markdowns for the quarter), said CFO Thomas D. Fingleton on a conference call with investors. May also suffered a 46 percent drop in earnings for the quarter, to $76 million.

May went after a younger shopper but failed to offer the right fashions, Fingleton said. “The characteristics of what caused this shortfall will not be correctable until later in the year,” he said. By contrast, Cincinnati-based Federated’s same-store sales grew 2.6 percent during the period, while earnings jumped 27 percent to $123 million. Federated says it hopes to reinvigorate May’s business by introducing its own highly successful private brands into the May mix once the merger is completed in the third quarter.

May operates 490 department stores under the Famous-Barr, Filene’s, Foley’s, Hecht’s, Jones Store, Kaufmann’s, Lord & Taylor, L.S. Ayres, Marshall Field’s, Meier & Frank, Robinsons-May and Strawbridge’s names, as well as 241 David’s Bridal, 450 After Hours Formalwear and 11 Priscilla of Boston stores. Federated has about 450 Macy’s and Bloomingdale’s stores.