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Federated to invest an additional $100 million this year

SHARE Federated to invest an additional $100 million this year

CINCINNATI — Federated Department Stores will invest an additional $100 million this fiscal year in its direct-to-consumer businesses, including Web sites such as macys.com and bloomingdales.com and its Bloomingdale's catalog.

"Our online sales continue to grow at a rapid pace as the national expansion of Macy's and Bloomingdales's attracts new customers to our stores, Web sites and catalog," Terry Lundgren, Federated's chairman, president and chief executive officer, said in a statement last week.

Lundgren said the company has seen exceptional growth in online sales in new Macy's markets such as Illinois, Michigan, Minnesota, Missouri, Oklahoma, Texas and Utah. Cincinnati-based Federated acquired rival May Department Stores Co. in 2005 and last year renamed those stores — including Marshall Field's, Foley's and Filene's — under the Macy's brand.

Federated expects its direct-to consumer businesses to grow to more than $1 billion in sales by 2008 from about $620 million in 2006, Lundgren said.

The additional capital investment includes construction of a distribution center in Goodyear, Ariz. Some of that investment also will go toward expansion of the direct-to-consumer warehouse management system and improvements to the order management system and the macys.com Web site.

The latest investment is in addition to about $130 million allocated last fiscal year to direct-to-consumer infrastructure improvements including a new distribution center opening this month near Portland, Tenn.