FEDERATED'S DEBUT TO TAKE CENTER STAGE WITH BARGAIN HUNTERS

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, February 5, 1992                   TAG: 9202050144
SECTION: BUSINESS                    PAGE: C5   EDITION: METRO 
SOURCE: Cox News Service
DATELINE: ATLANTA                                LENGTH: Short
FEDERATED'S DEBUT TO TAKE CENTER STAGE WITH BARGAIN HUNTERS
The new Federated Department Stores Inc. expects to make its debut today on the New York Stock Exchange, and some analysts predict its shares will be a big hit with bargain-hunting investors.
"A lot of people will be interested in playing this turnaround," said analyst Andrew J. Herenstein of Delaware Bay Co. in New York.
Cincinnati-based Federated - the parent of Rich's, Bloomingdales, Burdines and six other department store chains - plans to emerge after two years in bankruptcy court. Analysts expect the shares, which were distributed to creditors as part of the bankruptcy reorganization, to trade on the Big Board at $13 to $15 a share initially. The stock was quoted at around $12.50 a share last week in the over-the-counter market.
Federated, which may sell as much as $700 million in additional stock to the public in six to 12 months to trim debt further, now values its stock at $25 a share, or 17 times projected earnings in 1993, when it expects to be profitable.
That's in the midrange of price-earnings ratios of department-store chains. The highly regarded Dillard Department Stores Inc., for example, now trades at 22 times earnings. May Department Stores Inc., parent of Thalhimers-Hecht's, sells at 14 times earnings.
The company recently took steps to cap interest costs, for example, which could save $50 million next year, Herenstein estimated.

by Bhavesh Jinadra by CNB