SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the fiscal quarter ended July
29, 1995.
FEDERATED DEPARTMENT STORES, INC.
151 West 34th Street
New York, New York 10001
(212) 695-4400
and
7 West Seventh St.
Cincinnati, Ohio 45202
(513) 579-7000
Delaware 1-13536 13-3324058
(State of (Commission File No.) (I.R.S. Employer
incorporation) Identification Number)
The Registrant has filed all reports required to be filed by
Section 12, 13 or 15 (d) of the Act during the preceding 12
months and has been subject to such filing requirements for the
past 90 days.
183,035,890 shares of the Registrant's Common Stock, $.01 par
value, were outstanding as of August 26, 1995.
PART I -- FINANCIAL INFORMATION
FEDERATED DEPARTMENT STORES, INC.
Consolidated Statements of Operations
(Unaudited)
(thousands, except per share figures)
13 Weeks Ended 26 Weeks Ended
July 29, July 30, July 29, July 30,
1995 1994 1995 1994
Net Sales, including leased
department sales $3,047,249 $1,596,100 $6,035,255 $3,249,731
Cost of sales 1,862,915 975,339 3,686,836 1,983,475
Selling, general and
administrative expenses 1,067,887 534,791 2,137,846 1,076,879
Business integration and
consolidation expenses 89,023 27,005 172,345 27,005
Charitable contribution to
Federated Department Stores
Foundation 25,581 - 25,581 -
Operating Income 1,843 58,965 12,647 162,372
Interest expense (114,057) (59,318) (223,558) (115,681)
Interest income 10,841 10,620 22,790 21,644
Income (Loss) Before Income
Taxes (101,373) 10,267 (188,121) 68,335
Federal, state and local income
tax benefit (expense) 34,447 (6,495) 64,196 (32,341)
Net Income (Loss) $ (66,926) $ 3,772 $ (123,925) $ 35,994
Earnings (Loss) per Share $ (.37) $ .03 $ (.68) $ .28
Average Number of Shares
Outstanding 182,830 126,578 182,754 126,517
The accompanying notes are an integral part of these unaudited
Consolidated Financial Statements.
FEDERATED DEPARTMENT STORES, INC.
Consolidated Balance Sheets
(Unaudited)
(thousands)
July 29, January 28, July 30,
1995 1995 1994
ASSETS:
Current Assets:
Cash $ 238,173 $ 206,490 $ 98,135
Accounts receivable 2,157,512 2,265,651 1,791,774
Merchandise inventories 2,694,564 2,380,621 1,341,496
Supplies and prepaid expenses 107,509 99,559 60,188
Deferred income tax assets 198,123 135,405 86,123
Total Current Assets 5,395,881 5,087,726 3,377,716
Property and Equipment - net 5,261,698 5,349,912 2,623,798
Intangible Assets - net 1,027,033 1,006,547 328,339
Notes Receivable 407,276 408,134 407,949
Other Assets 365,436 424,671 792,354
Total Assets $ 12,457,324 $ 12,276,990 $ 7,530,156
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current Liabilities:
Short-term debt $ 259,988 $ 463,042 $ 220,602
Accounts payable and accrued
liabilities 2,139,335 2,183,711 1,178,641
Income taxes 35,729 65,319 68,892
Total Current Liabilities 2,435,052 2,712,072 1,468,135
Long-Term Debt 5,121,445 4,529,220 2,715,395
Deferred Income Taxes 873,285 890,729 801,308
Other Liabilities 503,223 505,359 226,492
Shareholders' Equity 3,524,319 3,639,610 2,318,826
Total Liabilities and Shareholders'
Equity $ 12,457,324 $ 12,276,990 $ 7,530,156
The accompanying notes are an integral part of these unaudited
Consolidated Financial Statements.
FEDERATED DEPARTMENT STORES, INC.
Consolidated Statements of Cash Flows
(Unaudited)
(thousands)
26 Weeks Ended 26 Weeks Ended
July 29, 1995 July 30, 1994
Cash flows from operating activities:
Net income (loss) $ (123,925) $ 35,994
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization of property
and equipment 206,556 110,922
Amortization of intangible assets 21,656 9,381
Amortization of financing costs 9,955 5,097
Amortization of original issue discount 981 8,857
Amortization of unearned restricted stock 2,569 972
Changes in assets and liabilities:
Decrease in accounts receivable 108,139 18,388
Increase in merchandise inventories (313,943) (125,728)
Increase in supplies and prepaid expenses (7,950) (11,945)
Decrease in other assets not separately
identified 29,982 13,006
Decrease in accounts payable and accrued
liabilities not separately identified (9,700) (33,103)
Decrease in current income taxes (29,590) (34,414)
Decrease in deferred income taxes (69,064) (242)
Increase (decrease) in other liabilities
not separately identified (1,612) 2,816
Net cash provided (used) by operating
activities (175,946) 1
Cash flows from investing activities:
Purchase of property and equipment (169,932) (106,839)
Disposition of property and equipment 23,841 1,442
Acquisition of company, net of cash acquired - (75,846)
Net cash used by investing activities (146,091) (181,243)
Cash flows from financing activities:
Debt issued 597,106 109,950
Financing costs (3,859) (2,258)
Debt repaid (208,916) (21,178)
Decrease in outstanding checks (36,676) (33,181)
Acquisition of treasury stock (375) (331)
Issuance of common stock 6,440 3,947
Net cash provided by financing activities 353,720 56,949
(Continued)
FEDERATED DEPARTMENT STORES, INC.
Consolidated Statements of Cash Flows
(Unaudited)
(thousands)
26 Weeks Ended 26 Weeks Ended
July 29, 1995 July 30, 1994
Net increase (decrease) in cash 31,683 (124,293)
Cash at beginning of period 206,490 222,428
Cash at end of period $ 238,173 $ 98,135
Supplemental cash flow information:
Interest paid $ 168,239 $ 102,283
Interest received 23,046 22,529
Income taxes paid (net of refunds received) 28,861 66,257
Schedule of noncash investing and financing
activities:
Capital lease obligations for new store
fixtures - 1,545
Debt assumed in acquisition of company - 40,000
The accompanying notes are an integral part of these unaudited
Consolidated Financial Statements.
FEDERATED DEPARTMENT STORES, INC.
Notes to Consolidated Financial Statements
(Unaudited)
1. Summary of Significant Accounting Policies
A description of the Company's significant accounting policies
is included in the Company's Annual Report on Form 10-K for
the fiscal year ended January 28, 1995 (the "1994 10-K"). The
accompanying Consolidated Financial Statements should be read
in conjunction with the Consolidated Financial Statements and
notes thereto in the 1994 10-K.
Because of the seasonal nature of the general merchandising
business, the results of operations for the 13 and 26 weeks
ended July 29, 1995 and July 30, 1994 (which do not include
the Christmas season) are not indicative of such results for
the fiscal year.
The Consolidated Financial Statements for the 13 and 26 weeks
ended July 29, 1995 and July 30, 1994, in the opinion of
management, include all adjustments (consisting only of normal
recurring adjustments) considered necessary to present fairly,
in all material respects, the consolidated financial position
and results of operations of the Company and its subsidiaries.
Certain reclassifications were made to prior years' amounts to
conform with the classifications of such amounts for the
current period.
2. Acquisition of Companies
On December 31, 1993, Federated Noteholding Corporation
("FNC"), a wholly owned subsidiary of the Company, paid $109.3
million in cash and issued a promissory note (the "Promissory
Note") in the principal amount of $340.0 million to The
Prudential Insurance Company of America ("Prudential"), in
exchange for 50% of a claim (the "Prudential Claim") held by
Prudential in the Chapter 11 reorganization of R. H. Macy &
Co., Inc. ("Macy's") and an option to acquire the remaining
50% of the Prudential Claim (the "Prudential Option"). This
investment was included in other assets in the Company's
Consolidated Balance Sheet at July 30, 1994.
On December 19, 1994, the Company completed its acquisition of
Macy's pursuant to a Plan of Reorganization (the "Macy's POR")
of Macy's and substantially all of its subsidiaries
(collectively, the "Macy's Debtors"). Pursuant to the Macy's
POR, Macy's merged with the Company, which became responsible
for making distributions of cash and debt and equity
securities to the holders of allowed claims against the Macy's
Debtors pursuant to the Macy's POR. In connection with the
acquisition, FNC exercised the Prudential Option, whereby it
acquired the remainder of the Prudential Claim in exchange for
$469.6 million in cash, and repaid the full amount of
indebtedness
FEDERATED DEPARTMENT STORES, INC.
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
under the Promissory Note. The total purchase price of the
acquisition, net of amounts issued or paid to wholly owned
subsidiaries of the Company (including FNC), was approximately
$3,815.9 million and consisted of the following:
(millions)
Cash payments, including exercise of the Prudential
Option and transaction costs $ 830.4
Assumption of merger-related liabilities 192.5
Issuance, reinstatement or assumption of debt 1,182.4
Issuance of 55.6 million shares of common stock 1,047.6
Issuance of warrants to purchase 18.0 million
shares of common stock 118.4
Cost of the initial investment in the Prudential
Claim, net of a $4.7 million cash distribution 444.6
$ 3,815.9
The Macy's acquisition was accounted for under the purchase
method and, accordingly, the results of operations of Macy's
have been included in the Company's results of operations
since the date of acquisition and the purchase price has been
allocated to Macy's assets and liabilities based on their
estimated fair values at the date of acquisition. Including
certain adjustments recorded in the 26 weeks ended July 29,
1995 to the assets and liabilities acquired, the excess of
cost over net assets acquired is approximately $350.6 million.
The following unaudited pro forma condensed statements of
operations give effect to the Macy's acquisition and related
financing transactions as if such transactions had occurred at
the beginning of the period presented.
13 Weeks Ended 26 Weeks Ended
July 30, 1994 July 30, 1994
(millions, except per share figures)
Net sales $ 2,987.8 $ 5,984.8
Net income (loss) 18.7 (20.9)
Earnings (loss) per share .10 (.12)
The foregoing unaudited pro forma condensed statements of
operations give effect to, among other pro forma adjustments,
the following:
(i) Interest expense on debt incurred to finance the
acquisition, the reversal of Macy's historical interest expense
and the reversal of the Company's historical interest expense on
certain indebtedness redeemed in connection with the acquisition;
(ii) Amortization of deferred debt expense related to debt
incurred to finance the acquisition;
(iii)Amortization, over 20 years, of the excess of cost over
net assets acquired, and amortization, over 40 years, of
tradenames acquired;
(iv) Depreciation and amortization adjustments related to fair
market value of assets acquired; and
(v) Adjustments to income tax expense related to the above.
FEDERATED DEPARTMENT STORES, INC.
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
The foregoing unaudited pro forma information is provided for
illustrative purposes only and does not purport to be
indicative of results that actually would have been achieved
had the Macy's acquisition been consummated on the first day
of the period presented or of future results.
On May 26, 1994, the Company purchased Joseph Horne Co., Inc.
("Horne's"), a department store retailer operating ten stores
in Pittsburgh and Erie, Pennsylvania for approximately $116.0
million including the assumption of $40.0 million of mortgage
debt and transaction costs. The acquisition was accounted for
under the purchase method of accounting and the purchase price
approximates the estimated fair value of the assets and
liabilities acquired. Results of operations for the stores
acquired are included in the Consolidated Financial Statements
from the date of acquisition. Pro forma financial results
have not been presented for this acquisition since it did not
significantly affect results of operations of the Company.
3. Business Integration and Consolidation Expenses
During the 26 weeks ended July 29, 1995, the Company recorded
$172.3 million of business integration and consolidation
expenses associated with the integration of Macy's into the
Company ($145.2 million) and the consolidation of the
Company's Rich's/Goldsmith's and Lazarus divisions ($27.1
million). The primary components of the Macy's integration
expenses were $67.8 million of inventory valuation adjustments
to merchandise in lines of business which the Company,
subsequent to the acquisition, eliminated or replaced, $21.6
million of costs to close and sell certain stores and to
convert a number of stores to other nameplates, $19.7 million
of severance costs and $36.1 million of other costs and
expenses associated with integrating Macy's into the Company.
Of the $27.1 million of expenses associated with the
divisional consolidation referred to above, $20.4 million
relates to inventory valuation adjustments to merchandise of
the affected divisions in lines of business which were
eliminated or replaced as a result of the consolidation.
During the 26 weeks ended July 30, 1994, the Company recorded
$27.0 million of business integration and consolidation
expenses for the integration of the facilities, and the
merchandising and operating functions, of the ten Horne's
department stores into the Company's Lazarus division.
The Company's accrued severance liability related to business
integration and consolidation expenses of $26.1 million at
January 28, 1995 was paid out during the 26 weeks ended July
29, 1995.
FEDERATED DEPARTMENT STORES, INC.
Management's Discussion and Analysis
of Financial Condition and Results of Operations
The Company acquired Macy's on December 19, 1994, and effected
other acquisitions (and dispositions) during its 1994 fiscal
year. Under the purchase method of accounting, the assets,
liabilities and results of operations associated with such
acquisitions have been included in the Company's financial
position and results of operations since the respective dates
thereof. Accordingly, the financial position and results of
operations of the Company presented and discussed herein are
generally not directly comparable between years.
Results of Operations
Comparison of the 13 Weeks Ended July 29, 1995 and July 30, 1994
For purposes of the following discussion, all references to
"second quarter of 1995" and "second quarter of 1994" are to
the Company's 13-week fiscal periods ended July 29, 1995 and
July 30, 1994, respectively.
Net sales for the second quarter of 1995 totaled $3,047.3
million, compared to net sales of $1,596.1 million for the
second quarter of 1994, an increase of 90.9%. Since July 30,
1994, the company added 133 department stores (121 through the
Macy's acquisition) and more than 135 specialty and clearance
stores and closed nine department stores. All of the specialty
and clearance stores were added through the Macy's
acquisition. Comparable store sales for the second quarter of
1995 increased 6.2% over the second quarter of 1994, including
sales of the Macy's stores that were open throughout both such
quarters.
Cost of sales was 61.1% as a percent of net sales for both the
second quarter of 1995 and the second quarter of 1994. Cost of
sales includes no charge in the second quarter of 1995
compared to a charge of $0.6 million in the second quarter of
1994 resulting from the valuation of merchandise inventory on
the last-in, first-out basis.
Selling, general and administrative expenses were 35.1% as a
percent of net sales for the second quarter of 1995 compared
to 33.5% for the second quarter of 1994. Since the credit card
programs relating to the acquired Macy's divisions are owned
by a third party, revenue from credit operations decreased as
a percentage of sales. Because selling, general and
administrative expenses are reported net of revenue from
credit operations, such decrease was the major factor
contributing to the increase in the selling, general and
administrative expense rate.
Business integration and consolidation expenses for the second
quarter of 1995 consist of $71.7 million associated with
integration of Macy's into the Company and $17.3 million
related to the consolidation of the Company's
Rich's/Goldsmith's and Lazarus divisions. For the second
quarter of 1994, business integration and consolidation
expenses of $27.0 million represents the one-time charge
associated with the integration of the ten Horne's stores into
the Company's Lazarus division.
Net interest expense was $103.2 million for the second quarter
of 1995, compared to $48.7 million for the second quarter of
1994. The higher interest expense for the second quarter of
1995 is principally due to the higher levels of borrowings
incurred in connection with the acquisition of Macy's.
FEDERATED DEPARTMENT STORES, INC.
Management's Discussion and Analysis
of Financial Condition and Results of Operations (Continued)
The Company's effective income tax rate of 34.0% for the
second quarter of 1995 differs from the federal income tax
statutory rate of 35% principally because of permanent
differences arising from the amortization of intangible assets
and state and local income taxes.
Comparison of the 26 Weeks Ended July 29, 1995 and July 30, 1994
For purposes of the following discussion, all references to
"1995" and "1994" are to the Company's 26 week fiscal periods
ended July 29, 1995 and July 30, 1994, respectively.
Net sales for 1995 were $6,035.3 million compared to $3,249.7
million for 1994, an increase of 85.7%. On a comparable store
basis, net sales increased 3.7%, including sales of the Macy's
stores that were open throughout both periods.
Cost of sales was 61.1% as a percent of net sales for 1995
compared to 61.0% for 1994. Cost of sales includes charges of
$1.8 million in 1995 compared to $5.8 million in 1994
resulting from the valuation of merchandise inventory on the
last-in, first-out basis. Additionally, because the Macy's
divisions have historically experienced higher inventory
shortages than the Company prior to the Macy's acquisition,
cost of sales for 1995 reflects higher anticipated inventory
shortage adjustments.
Selling, general and administrative expenses were 35.4% as a
percent of net sales for 1995 compared to 33.2% for 1994.
Since the credit card programs relating to the acquired Macy's
divisions are owned by a third party, revenue from credit
operations decreased as a percentage of sales. Because
selling, general and administrative expenses are reported net
of revenue from credit operations, such decrease was the major
factor contributing to the increase in the selling, general
and administrative expense rate.
Business integration and consolidation expenses for 1995
consist of $145.2 million associated with the integration of
Macy's into the Company and $27.1 million related to the
consolidation of the Company's Rich's/Goldsmith's and Lazarus
divisions. During the remainder of fiscal 1995, the Company
presently expects to incur approximately $90.0 million of
additional business integration and consolidation expenses as
a result of the Macy's acquisition, the divisional
consolidation referred to above and the discontinuation of
the Company's clearance store operations.
Net interest expense was $200.8 million for 1995 compared to
$94.0 million for 1994. The higher interest expense for 1995
is principally due to higher levels of borrowing incurred in
connection with the acquisition of Macy's.
The Company's effective income tax rate of 34.1% for 1995
differs from the federal income tax statutory rate of 35.0%
principally because of permanent differences arising from the
amortization of intangible assets and state and local income
taxes.
FEDERATED DEPARTMENT STORES, INC.
Management's Discussion and Analysis
of Financial Condition and Results of Operations (Continued)
Liquidity and Capital Resources
For purposes of the following discussion, all references to
"1995" and "1994" are to the Company's 26 week fiscal periods
ended July 29, 1995 and July 30, 1994, respectively.
The Company's principal sources of liquidity are cash from
operations, cash on hand and available credit facilities.
Net cash used by operating activities in 1995 increased $175.9
million compared to net cash provided by operating activities
in 1994. The most significant factors contributing to this
increased use of cash were lower net income in 1995 and higher
payments of non-merchandise payables and accrued liabilities
(including merger - related liabilities). Partially
offsetting these factors was the higher decrease in accounts
receivable balances during 1995.
Net cash provided by the Company for all financing activities
was $353.7 million for 1995, and net cash used in investing
activities was $146.1 million. During 1995, the Company sold
$597.1 million of receivables backed certificates. The Company
repaid $99.9 million of short-term debt under its bank credit
facility and commercial paper program and $109.1 million of
other debt, consisting primarily of the Company's subsidiary
trade obligations. The Company opened five department stores
and closed four department stores in 1995.
As discussed in Item 5 of this report, the Company has entered
into agreements providing for the acquisition by the Company
of Broadway Stores, Inc. ("Broadway") in exchange for
approximately 12.7 million shares of the Company's common
stock. In addition, the Company, a wholly owned subsidiary of
the Company ("FNC II"), and Prudential entered into an
agreement (the "Prudential Agreement") providing for the
purchase by FNC II from Prudential of certain mortgage
indebtedness of Broadway for consideration consisting of a
$221.1 million promissory note of FNC II and, at FNC II's
option, either $200.0 million in cash or a number of shares of
the Company's common stock determined in accordance with the
provisions of the Prudential Agreement. According to
information furnished to the Company by Broadway, at and for
the 26 weeks ended July 29, 1995, Broadway had total assets of
$1,911.6 million, shareholders' equity of $305.4 million,
sales of $884.6 million, and a net loss of $80.7 million.
Management believes the department store industry will
continue to consolidate. Accordingly, the Company intends
from time to time to consider additional acquisitions of
department store assets and companies.
Management of the Company believes that, with respect to its
current operations, cash on hand and funds from operations,
together with its credit facilities, will be sufficient to
cover its reasonably foreseeable working capital, capital
expenditure and debt service requirements. Acquisition
transactions, if any, are expected to be financed through a
combination of cash on hand and from operations and the
possible issuance from time to time of long-term debt or other
securities. Depending upon conditions in the capital markets
and other factors, the Company will from time to time consider
other possible capital markets transactions to reduce its cost
of capital, including the refinancing of indebtedness.
PART II - - OTHER INFORMATION
FEDERATED DEPARTMENT STORES, INC.
Item 1. Legal Proceedings
The information regarding legal proceedings contained in
the Company's Quarterly Report on Form 10-Q for the period
ended April 29, 1995 covers events known to the Company
and occurring prior to June 6, 1995. The following is a
general description of certain developments in the legal
proceedings known to the Company that arose subsequent to
that date and prior to September 5, 1995.
Cash Payment Claims Against Macy's Debtors. As reported
in the 1994 10-K, certain claims or portions thereof
(collectively the "Cash Payment Claims") against the
Macy's Debtors which, to the extent allowed by the United
States Bankruptcy Court for the Southern District of New
York, will be paid in cash pursuant to the Macy's POR, are
currently disputed by the Company. As of September 5,
1995, the aggregate face amount of disputed Cash Payment
Claims was approximately $385.4 million, while the
estimated allowed amount thereof was approximately $257.0
million. Although there can be no assurance with respect
thereto, the Company believes that the actual allowed
amount of disputed Cash Payment Claims will not be
materially greater than the estimated allowed amount
thereof.
Other Proceedings. The Company and its subsidiaries are
also involved in various legal proceedings incidental to
the normal course of their business. Management does not
expect that any of such proceedings will have a material
adverse effect on the Company's consolidated financial
position or results of operations.
Item 5. Other Information
On August 14, 1995, the Company, a wholly owned subsidiary
of the Company ("Newco"), and Broadway entered into an
agreement (the "Merger Agreement") pursuant to which, on
the terms and subject to the conditions set forth therein,
Newco will be merged with and into Broadway (the
"Merger"), and Broadway will thereby become a subsidiary
of the Company. At the effective time of the Merger,
among other things, each outstanding share of Broadway
common stock will be converted into 0.27 shares of the
Company's common stock, resulting in the issuance of
approximately 12.7 million shares of the Company's common
stock. In connection with the Merger Agreement, the
Company and Zell/Chilmark Fund, L.P. ("Zell/Chilmark")
entered into an agreement (the "Stock Agreement"),
pursuant to which, among other things, Zell/Chilmark
agreed to vote the approximately 54% of the outstanding
shares of Broadway common stock owned by it in favor of
the adoption of the Merger Agreement and granted to the
Company an option to purchase such shares for
consideration consisting of 0.27 shares of the Company's
common stock for each such share of Broadway common stock.
In addition, the Company, FNC II, and Prudential entered
into the Prudential Agreement providing for the purchase
by FNC II from Prudential of certain mortgage indebtedness
of Broadway for consideration consisting of a $221.1
million promissory note of FNC II and, at FNC II's option,
either $200.0 million in cash or a number of shares of the
Company's common stock determined in accordance with the
provisions of the Prudential Agreement.
PART II - - OTHER INFORMATION
FEDERATED DEPARTMENT STORES, INC. - continued
The consummation of the foregoing transactions is subject
to the satisfaction or waiver of various conditions, as to
which there can be no assurance. The Merger Agreement,
the Stock Agreement, and the Prudential Agreement are
filed herewith as Exhibits 10.1, 10.2, and 10.3,
respectively, and are incorporated herein by this
reference.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1 Agreement and Plan of Merger, dated as of August
14, 1995, among Broadway, the Company, and Newco
(incorporated by reference to Exhibit 2.1 to the Company's
Registration Statement on Form S-4, Registration No.
33-62077)
10.2 Stock Agreement, dated as of August 14, 1995,
between the Company and Zell/Chilmark (incorporated by
reference to the Company's Schedule 13D, dated August 14,
1995, relating to the common stock of Broadway)
10.3 Purchase Agreement, dated as of August 14, 1995,
among Prudential, the Company, and FNC II
11 Statement re computation of per share earnings
27 Financial Data Schedule
(b) Reports on Form 8-K
No reports were filed on Form 8-K during the quarter
ended July 29, 1995.
FEDERATED DEPARTMENT STORES, INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunder duly authorized.
FEDERATED DEPARTMENT STORES, INC.
Date September 8, 1995 /s/ Dennis J. Broderick
Dennis J. Broderick
Senior Vice President, General
Counsel and Secretary
/s/ John E. Brown
John E. Brown
Senior Vice President
and Controller
(Principal Accounting Officer)