Either Federated must change its strategy of renaming stores, or get ready to say goodbye to Lord & Taylor’s Fifth Avenue flagship store.

Federated Department Stores Incorporated agreed to acquire May Department Stores, the two announced yesterday, in a cash and stock deal worth $11 billion. The agreement will create a retail giant that will operate 1,600 stores in 49 states, Guam, Puerto Rico and the District of Columbia.

Though no name changes are planned until 2006, Federated said it is likely that most of May’s regional department stores will be converted to Macy’s.

“Operating regional stores primarily under one brand means we can advertised nationally,” said Federated’s chief executive, Terry Lundgren, in a statement.

As a result, Federated’s pending acquisition of May puts the upscale Lord & Taylor’s 611,000-square-foot Manhattan store at Fifth Avenue and 38th Street at particular risk of being shut down because of its proximity to Macy’s on West 34th Street, according the chairman of New York retail consulting and investment banking firm Davidowitz & Associates, Howard Davidowitz. “There will be stores sold off and closed,” he said, estimating the number at 150.

If Federated were to sell some of the stores, a likely buyer would be J.C. Penney Company, which has $400 million to $500 million in cash and is looking to expand.

“At the end of the day, you’re going to have two brands: Macy’s and Bloomingdale’s,” Mr. Davidowitz said. “They’ve said that’s their strategy.”

Also, as of Februrary 10 May report ed it had closed 25 of the 32 Lord & Taylor stores that it has deemed underperformers.

“Lord & Taylor is a disaster. That’s why they’re closing the stores,” Mr. Davidowitz said. “If you rebrand it as Macy’s, it’s right next door [to Macy’s West 34th Street location]. You can’t have two,” he said.

“The bottom line is that they’re going to get out of a lot of real estate. I don’t expect that [Manhattan’s] Lord & Taylor store to be Lord & Taylor or be Macy’s.”

However, the chief executive of Upper Montclair, N.J.-based Barnard’s Retail Consulting Group Business, Kurt Barnard, doesn’t see Manhattan’s Lord & Taylor going away anytime soon.

“I would think they’ll keep the Lord & Taylor name in New York for some time to come,” said Mr. Barnard. “They may have to make exceptions to their rule for the time being,” in order not to lose business, he said.

Federated’s acquisition of May will also likely mean an increase in local mid-level executive jobs as Federated merges May’s St. Louis headquarters into its Cincinnati and New York corporate offices.

Federated said it will make St. Louis the headquarters of one its operating divisions without specifying further.

Together, May and Federated do about $30 billion in annual sales and have about 170,000 employees.

Federated operates Macy’s and Bloomingdale’s. May owns Lord & Taylor, Marshall Field’s and Filene’s.

Pending government and shareholder approval, the merger is expected to close during the third quarter of this year.

Federated’s spokeswoman, Carol Sanger, did not return a call for comment.