US retailer May Department Stores Co, which has signed a deal to be bought by Federated Department Stores Inc, has posted a 46 per cent plummet in first-quarter earnings on poor sales of its ladies' and men's apparel ranges and clearance markdowns.

First-quarter net earnings totalled $41 million compared with earnings of $76m in the same quarter in 2004, which includes store divestiture costs of $9m.

John Dunham, May's chairman, said: "Sales of our proprietary ladies' and men's apparel brands were among our weakest performing categories, and during the quarter we took incremental markdowns to keep our proprietary apparel inventories current."

At the end of the first quarter, May operated 490 department stores under the names of Famous-Barr, Filene's, Foley's, Hecht's, Kaufmann's, Lord & Taylor, LS Ayres, Marshall Field's, Meier & Frank, Robinsons-May, Strawbridge's, and The Jones Store, as well as 241 David's Bridal stores, 450 After Hours Formalwear stores, and 11 Priscilla of Boston stores in its Bridal Group.

May's $11 billion merger with Federated is creating the largest department store chain in the US.