Federated, the largest operator of department stores in the U.S., has started to shift its ad spending out of newspapers and into electronic media and direct mail, warns securities firm Merrill Lynch
in a research report issued Monday morning. Calling newspaper industry ad forecasts "at risk," Merrill Lynch analyst Lauren Rich Fine estimated that Federated currently invests $900 million in
newspapers--accounting for more than 2 percent of the medium's ad revenues--and that its pending merger with another major department store operator, May's, could create a "double whammy" for the
nation's newspapers.
