REASONS FOR SETTLEMENT

   This statement accompanies the Consent Decree executed by defendants
   Federated Department Stores, Inc. and Macys.com, Inc., in settlement
   of an action brought to recover penalties and other equitable relief
   from the defendants for engaging in acts or practices in violation of
   the Commission's Trade Regulation Rule Concerning Mail or Telephone
   Order Merchandise, 16 C.F.R. Part 435 ("Mail Order Rule").

   Pursuant to Section 5(m)(3) of the Federal Trade Commission Act, as
   amended (15 U.S.C. § 45(m)(3)), the Commission hereby sets forth its
   reasons for settlement by entry of a Consent Decree and injunction:

   On the basis of the allegations contained in the attached Complaint,
   the Commission believes that the payment of $350,000 in civil
   penalties by the defendants constitutes an appropriate amount upon
   which to base a settlement. The amount should assure compliance with
   the law by defendants and by others who engage in practices covered by
   the Mail Order Rule. Further, defendants are permanently enjoined from
   engaging in acts or practices that are prohibited by the Mail Order
   Rule. With the entry of such Consent Decree the time and expense of
   litigation will be avoided.

   For the foregoing reasons, the Commission believes that the settlement
   by entry of the attached Consent Decree with Federated Department
   Stores, Inc. and Macys.com, Inc., is justified and well within the
   public interest.

                    IN THE UNITED STATES DISTRICT COURT
                            DISTRICT OF DELAWARE

                    UNITED STATES OF AMERICA, Plaintiff

                                     v.

                   FEDERATED DEPARTMENT STORES, INC., and
                        MACYS.COM, INC., Defendants.

                              Civil Action No.
         COMPLAINT FOR CIVIL PENALTIES, INJUNCTIVE AND OTHER RELIEF

   Plaintiff, the United States of America, acting upon notification and
   authorization to the Attorney General by the Federal Trade Commission
   ("Commission"), for its Complaint alleges that:

   1. Plaintiff brings this action under Sections 5(a)(1), 5(m)(1)(A),
   13(b), and 16(a) of the Federal Trade Commission Act ("FTC Act"), 15
   U.S.C. §§ 45(a)(1), 45(m)(1)(A), 53(b), and 56(a), to obtain monetary
   civil penalties and injunctive and other relief for defendants'
   violations of the Commission's Trade Regulation Rule Concerning the
   Sale of Mail or Telephone Order Merchandise (the "Mail Order Rule" or
   "Rule"), 16 C.F.R. Part 435.

                           JURISDICTION AND VENUE

   2. This Court has jurisdiction over this matter under 28 U.S.C.
   1331, 1337(a), 1345, and 1355 and under 15 U.S.C. §§ 45(m)(1)(A),
   53(b), and 56(a). This action arises under 15 U.S.C. § 45(a)(1).

   3. Venue in the District of Delaware is proper under 15 U.S.C. § 53(b)
   and under 28 U.S.C. §§ 1391(b-c) and 1395(a).

                                 DEFENDANTS

   4. Defendant Federated Department Stores, Inc. is a Delaware
   corporation with its office and principal place of business located at
   7 W. Seventh Street, Cincinnati, Ohio 45202. Jurisdiction and venue
   over defendant Federated Department Stores, Inc. in the District of
   Delaware is proper.

   5. Defendant Macys.com, Inc. is a New York corporation with its office
   and principal place of business located within the Northern District
   of California at 170 O'Farrell Street, San Francisco, California
   94102. Defendant Macys.com, Inc. is a wholly-owned subsidiary of
   Federated Department Stores, Inc., and transacts business in the
   District of Delaware.

                    IN THE UNITED STATES DISTRICT COURT
                            DISTRICT OF DELAWARE

                    UNITED STATES OF AMERICA, Plaintiff

                                     v.

                   FEDERATED DEPARTMENT STORES, INC., and
                        MACYS.COM, INC., Defendants.

                              Civil Action No.
     CONSENT DECREE AND ORDER FOR CIVIL PENALTIES, INJUNCTIVE AND OTHER
                                   RELIEF

   WHEREAS plaintiff, the United States of America, has commenced this
   action by filing the Complaint herein; defendants have waived service
   of the Summons and Complaint; the parties have been represented by the
   attorneys whose names appear hereafter; and the parties have agreed to
   settlement of this action upon the following terms and conditions,
   without adjudication of any issue of fact or law and without
   defendants admitting liability for any of the matters alleged in the
   Complaint, and without this Consent Decree and Order constituting any
   finding or evidence against the defendant;

   THEREFORE, upon stipulation of plaintiff and defendants, it is hereby
   ORDERED, ADJUDGED, and DECREED as follows:

   1. This Court has jurisdiction of the subject matter and of the
   parties.

   2. The Complaint states a claim upon which relief may be granted
   against the defendants under Sections 5(a)(1), 5(m)(1)(A), 13(b), and
   16(a) of the Federal Trade Commission Act, 15 U.S.C. §§ 45(a)(1),
   45(m)(1)(A), 53(b), and 56(a).

                                 DEFINITION

   3. For the purposes of this Consent Decree, the term "Mail Order Rule"
   means the Federal Trade Commission's Trade Regulation Rule Concerning
   Mail or Telephone Order Merchandise, 16 C.F.R. Part 435. A copy of the
   Mail Order Rule is attached hereto as "Appendix A" and incorporated
   herein as if fully set forth verbatim.

                               CIVIL PENALTY

   4. Defendants Federated Department Stores, Inc., and Macys.com, Inc.,
   their successors and assigns, shall pay to plaintiff a civil penalty,
   pursuant to section 5(m)(1)(A) of the Federal Trade Commission Act, 15