Federated to trim 1,110 jobs in Boston

Federated Department Stores Inc. yesterday said it plans to eliminate at least 1,110 jobs in Boston and sell the flagship Filene's store in Downtown Crossing next year as part of its merger with the Filene's owner.

The cuts are the result of shuttering a central administrative office that served all Filene's department stores in New England and Kaufmann's stores in New York and surrounding states. The Boston reduction represents about one-sixth of the 6,200 jobs that Federated plans to trim from corporate offices across the country.

Federated has previously said there would be job losses related to store closings but had not mentioned reductions at regional administrative offices. Federated has not disclosed how many positions will be cut at the eight retail stores it will close in Massachusetts but about 1,500 jobs are at stake.

Federated officials said some affected employees will be offered positions elsewhere in the new combined company but did not provide details. Corporate employees who are terminated after March 1 will receive severance packages and outplacement assistance; Federated hasn't disclosed plans for store workers.

This is the latest in a series of mergers that have resulted in significant job losses in Massachusetts. Bank of America has eliminated about 1,450 positions after buying FleetBoston Financial Corp., though it has since added at least 400 jobs in Massachusetts. Procter & Gamble Co., which is acquiring Boston shaving firm Gillette Co., plans 6,000 cuts across both companies -- many of which could come from Gillette's Prudential Tower headquarters of 1,100 employees.

Beyond job cuts, Federated also said yesterday it will sell or lease the Filene's building in Downtown Crossing because the site has too much space for its needs and would require costly renovations to turn it into a Macy's location. As part of its merger with May Department Stores Co., Federated is converting regional chains, including Filene's, into Macy's by fall 2006 to broadly position Macy's as a national brand.

Federated will close sites in shopping centers where both a Macy's and Filene's currently exist.

In Downtown Crossing, Federated will continue to operate Macy's at its current location -- while closing the Filene's across the street.

''We're happy with the Macy's store, and we spent a lot of money on the store," said Tom Cole, Federated's vice chairman of support services and co-chairman of the transition team overseeing the $17 billion merger with May to create a chain of about 950 stores. ''But it was not an easy call by any stretch of the imagination."

The Filene's site, built in 1912, has 656,000 square feet -- about 266,000 square feet more than the space Macy's leases from the Markley Group LLC of Los Angeles on the bottom four floors of the building it occupies across the street. Real estate analysts estimate the Filene's building, which has Filene's Basement (a separate company) as a tenant, could fetch $130 million or more depending on the use of the site. The old Woolworth's building in Downtown Crossing, housing tenants including T.J. Maxx, Marshalls, and H&M in 149,977 square feet, sold last summer for $110 million.

Pat Boudrot, a Filene's Basement spokeswoman, said the company has a long-term lease and does not expect a new owner to oust the discount retailer that is one of Boston's biggest tourist attractions. Boudrot said the company, however, would need to negotiate the entrances and utility expenses, which it currently shares with Filene's.

Mayor Thomas M. Menino, who previously said he favored Macy's moving into the Filene's building, disclosed yesterday that he now believes the Filene's building offers better development opportunities.

''It's gives us more flexibility to do retail on the first two or three floors, and upper floors of office space, hotels, or condos," Menino said. ''The Macy's building is not that conducive to redevelopment and this will give us great new energy downtown. This is not a bad day for Downtown Crossing."

Menino said the Boston Redevelopment Authority, which oversees development in Downtown Crossing, has already received eight calls from companies interested in the Filene's site. He declined to identify them. Meredith Baumann, a BRA spokeswoman, also declined to name them.

Menino previously said discounter Target Corp. is interested in moving into Downtown Crossing if space becomes available. Other local officials and industry executives have confirmed that Home Depot Inc., Jordan's Furniture, Kohl's Corp., and Wal-Mart Stores Inc. have approached the city about moving into a vacated department store space in Downtown Crossing. A Wal-Mart spokesman earlier this month confirmed that company executives had met with Boston officials but said the Bentonville, Ark., company is not interested, at this time, in locating a store in Downtown Crossing.

Spaulding & Slye principal James M. Koury said Federated's decision to sell the Filene's building makes more sense, considering the aggressive market demand for hotel and residential space. Koury said the Filene's location, with an MBTA station in the building, is a more attractive prospect for redevelopment than the Macy's site.

Federated yesterday also said it planned to turn a Filene's into a Bloomingdale's at the Mall at Chestnut Hill in Newton and sell the smaller Bloomingdale's apparel store that is nearby. The company also plans to sell off its bridal group division, which includes Priscilla of Boston, and it is still deciding what to do with its smaller, upscale Lord & Taylor department store chain.

Jenn Abelson can be reached at abelson@globe.com.