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Lundgren’s Time Near, Seen as New Chief Exec For Federated Stores

Speculation was hot last week that Terry Lundgren will soon be named as ceo of Federated Department Stores.

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Taking a low profile has been Zimmerman’s style, as a financial and operations executive, while the more front and center and merchandise-oriented Lundgren has been visible in the fashion markets and in the media. Zimmerman has been based at Federated’s Cincinnati headquarters, while Lundgren is based in Federated’s New York offices inside Macy’s Herald Square.

As Questrom’s protege, it has seemed almost inevitable for five years that Lundgren would one day become Federated’s ceo. When Questrom made a career move, Lundgren followed.

The two worked together at Bullock’s, then again at Neiman Marcus, where Questrom was ceo, and later Lundgren became ceo. Subsequently, the two were reunited at Federated. At Questrom’s retirement party, Lundgren described him as "a true mentor and a great friend" and many think that Lundgren has learned a lot from Questrom, including leadership skills.

Currently, Questrom is chairman and ceo of J.C. Penney Co., but chances of Lundgren winding up there seem slim, since he seems to be getting what he wants from Federated.

Lundgren began his retail career in 1975 at Federated’s former Bullock’s division, now a part of Macy’s West, then became a vice president and general merchandise manager of Bullock’s in 1985, and two years later, president of Bullock's Wilshire, then a specialty fashion group owned by Federated.

From 1988 to 1994, Lundgren was at Neiman Marcus in Dallas, serving first as executive vice president of stores and then, in 1990, as chairman and ceo. He returned to Federated in 1994 as chairman and ceo of Federated Merchandising and is credited with integrating Macy’s merchandising and product development functions into Federated.

On Tuesday, Federated is scheduled to report its results for 2002.

According to sources, last year, Macy’s East led the Federated pack in total dollar profits and profits as a percent of sales, finishing second is sales gains. Bloomingdale’s led the pack in comp-store gains.

Federated does not break out results by division.

While 2001 was a tough year, because of the Fingerhut problem and 9/11, the 2002 results are expected to show an improvement. For 2001 the company posted $15.65 billion in sales and losses of $276 million, including charges. Lundgren, if he becomes ceo, will face severe challenges, including the economy, growing competition from Wal-Mart, Target, Kohl’s and ironically from his former mentor Questrom at Penney’s.
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