In today's increasingly competitive retail world — in which Wal-Mart sets price trends and e-tailers offer everything from Prada to Paxil — one company is attempting to reinvent the department store.

With 857 stores and a flourishing online business, Federated Department Stores Inc. is now promoting Macy's as a national brand and hoping its "affordable luxury" will lure consumers from discount stores and luxury venues alike.

Federated converted more than 400 of its newly acquired stores to Macy's on Sept. 9, bringing the nameplate to cities that never before had a Macy's. It has struck deals with designers Elie Tahari, Oscar de la Renta and Martha Stewart, who are developing lines exclusively for Macy's.

And it's building a new distribution center to accommodate an anticipated increase of more than 60 percent in online sales.

"We've reinvented the department store, we're ... redefining the industry and now we're a national brand for the first time," Federated spokesman Jim Sluzewski said.

The company, which has corporate offices in Cincinnati and New York, now operates 819 Macy's and 37 Bloomingdale's stores in the United States, Guam and Puerto Rico, as well as macys.com, bloomingdales.com and Bloomingdale's By Mail.

With its new national ad campaign and more upscale merchandise, Federated has captured the attention of analysts. Merrill Lynch named it as its "holiday department store pick."

Macy's officials expect the ubiquitous brand and national availability of products to boost sales.

"In the short term, the biggest growth is coming from the fact that we are now national," said Peter Sachse, chairman and CEO of macys.com. "We are 800 stores when as little as two years ago, we only had 180 stores that said Macy's on them."

The other regional stores —Rich's, Lazarus, Goldsmith's, Burdine's and The Bon Marche — were converted to Macy's in March 2005.

With the purchase of May Department Stores in August 2005, Federated acquired 487 stores, including Filene's, Hecht's, Kaufmann's, Marshall Field's, Lord & Taylor and David's Bridal. Federated sold Lord & Taylor to NRDC Equity Partners Inc., announced plans to sell David's Bridal, and is in the final stages of selling other stores that were not converted. Meanwhile, Federated has begun investing about $4 billion in store improvements.

In general, sales at the May stores have lagged those of Federated's established stores. Analysts attribute the slow start to short-term disruption, and they anticipate sales to rebound.

They note that the temporary lag is being offset by stronger-than-expected sales at stores open at least a year, a measure that reflects the strength of the company's ongoing operations.

With about $2.7 billion being spent on capital improvements this year and next, including a new distribution center that should be ready in the spring, Federated expects direct-to-consumer sales to rise to more than $750 million by 2008 from about $450 million in 2005.

Jennifer Hicks, general manager of the Macy's at Palisades Center in West Nyack, N.Y., has seen an increase in customers since it was transformed from the Filene's she opened eight years ago.

"There's definitely that Macy's name recognition," she said. "You can hear people out in the mall saying, 'I didn't know there was a Macy's here' heading down this way."