Finlay Expects to Lose 194 Stores, $242 Million of Revenue

The merger between Federated and May will cause Finlay, operator of jewelry departments in department stores, to lose 194 stores that generated nearly a quarter of its revenues last year - $242 million.

Finlay Enterprises expects to ultimately operate approximately 404 Federated doors compared to the 588 doors the company is currently operating in today. Finlay will operate in four of the seven Macy's divisions as well as the Bloomingdale's and Lord & Taylor store groups.

As a result of Federated's recently announced integration plans, Finlay expects to no longer operate in the following 194 locations:

142 stores under various regional nameplates that are slated to be phased into the Macy's East and West divisions, which are Federated divisions in which Finlay has not historically operated. Finlay anticipates the transition of these stores to begin after Mother's Day and be completed by August 1, 2006.

48 stores that were previously announced to be slated for divestiture.

4 stores that will be closed in preparation for reopening as Bloomingdale's locations.

The above 194 locations accounted for approximately $242 million of revenue, or approximately 24 percent of Finlay's projected fiscal 2005 total annual sales of $1 billion.

In addition to the store closings listed above, Finlay expects to gain approximately 11 new doors as a result of the realignment, as follows:

3 new Bloomingdale's stores;

4 stores that will be moved from Macy's East or West to one of the Federated divisions in which Finlay operates; and

4 new doors that are scheduled to open in fall 2005.

These 11 new doors are expected to generate approximately $15 million of revenue on an annual basis.