updated 5/19/2006 6:16:05 PM ET 2006-05-19T22:16:05

Federated Department Stores Inc. is bringing consumer electronics back into its stores with a robotic vending machine that will roll out in 180 Macy’s stores this fall.

Federated’s top executive announced at Friday’s annual shareholder meeting that the company has signed an agreement with San Francisco-based Zoom Systems to provide the self-serve, robotic “Zoom Stores” at Macy’s locations in 32 cities beginning this fall.

“This is exciting because it brings most-wanted merchandise into our stores in a unique new way,” Terry J. Lundgren, Federated’s chairman, president and CEO, told shareholders while demonstrating one of the machines. “It gets us back into a category we know our customers want.”

Lundgren demonstrated the 28-square-foot unit to shareholders, using his Macy’s Visa card to buy an iPod. Apple's iPod music players and accessories make up the primary assortment of merchandise displayed on shelves behind glass.

A touch screen allows customers to get product and price information and select an item, which is then retrieved by a robotic arm and dropped into a delivery bin. Payment is made with the swipe of a credit or debit card or a Macy’s gift card.

Lundgren said electronics have been unprofitable for Federated in the past so he did not want to go with a full electronics department.

“I’ve wanted to be in electronics for a long time, but we had just never been able to figure out how to do it,” Lundgren said.

Zoom Systems will own the inventory and machines, and Federated will own the space and get an undisclosed percentage of sales, Lundgren said.

“There is virtually no cost on our part,” he said.

He said he envisions three or four of the machines in larger stores and believes other types of electronics products can be included later. Items from Sony Corp. and Motorola Inc. will be tested this fall.

The shop was tested at a Federated store in San Francisco, and shoppers seemed comfortable buying the electronics products there, said Gower Smith, Zoom’s founder and CEO.

Besides the vending machines, Federated also announced:

  • Frango candy mints, sold for years at the Marshall Fields department stores to converted to Macy’s stores in September, will be sold nationwide at Macy’s locations this fall.
  • A new line of sportswear designed by Elie Tahari will be sold exclusively at Macy’s stores.
  • Macy’s new home textiles private brand, Style & Co. Home, will roll out to nearly 500 stores.

Lundgren also assured shareholders that the integration of May Department Stores is progressing as planned following last year’s acquisition that created the nation’s largest department store chain.

Federated, with corporate offices in Cincinnati and New York, operates more than 850 department stores in 45 states, the District of Columbia, Guam and Puerto Rico.

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