Federated Department Stores signed an agreement Wednesday to sell department store Lord & Taylor to NRDC Equity Partners for $1.19 billion.

Federated called Lord & Taylor a "niche specialty retailer" and said the chain "does not fit with Federated's strategic focus on building the nationwide Macy's and Bloomingdale's brands." The deal includes 48 Lord & Taylor stores in nine states and the District of Columbia, as well as a distribution center in Pennsylvania.

The Wall Street Journal reported that Lord & Taylor is expected to continue to operate as a retailer and that the current CEO is expected to remain in place.

Federated acquired Lord & Taylor when it bought May Department Stores in 2005.