AMENDED AND RESTATED GUARANTEE AGREEMENT

Exhibit 10.2

AMENDED AND RESTATED GUARANTEE AGREEMENT

dated as of

January 5, 2009,

among

MACY’S, INC.

(formerly known as FEDERATED DEPARTMENT STORES, INC.)

MACY’S RETAIL HOLDINGS, INC.

(formerly known as FEDERATED RETAIL HOLDINGS, INC.)

THE SUBSIDIARY GUARANTORS PARTY HERETO

and

JPMORGAN CHASE BANK, N.A.,

as Paying Agent

TABLE OF CONTENTS

Schedule A – List of Initial Subsidiary Guarantors

Schedule B — Subordination Terms

Exhibit A – Supplement to the Amended and Restated Guarantee Agreement

AMENDED AND RESTATED GUARANTEE AGREEMENT dated as of January 5, 2009, among MACY’S, INC. (formerly known as FEDERATED DEPARTMENT STORES, INC.) (“ Parent ”), MACY’S RETAIL HOLDINGS, INC. (formerly known as FEDERATED RETAIL HOLDINGS, INC.) (the “ Borrower ”), the SUBSIDIARY GUARANTORS party hereto and JPMORGAN CHASE BANK, N.A., as Paying Agent.

Reference is made to (a) the Amended and Restated Credit Agreement dated as of August 30, 2007 (as in effect on the date hereof, the “ Existing Credit Agreement ”) among Parent, the Borrower, the lenders party thereto, JPMorgan Chase Bank, N.A. and Bank of America, N.A., as administrative agents and JPMorgan Chase Bank, N.A., as paying agent and (b) the Amended and Restated Guarantee Agreement dated as of August 30, 2007 (as in effect on the date hereof, the “ Existing Guarantee Agreement ”) among Parent, the Borrower and JPMorgan Chase Bank, N.A., as paying agent. The Existing Credit Agreement is being amended and restated pursuant to and in accordance with the Amendment and Restatement Agreement dated as of December 18, 2008 (the “ Amendment and Restatement Agreement ”) among Parent, the Borrower, the Lenders party thereto, JPMorgan Chase Bank, N.A. and Bank of America, N.A., as Administrative Agents and JPMorgan Chase Bank, N.A., as Paying Agent (the Existing Credit Agreement, as so amended and restated, by the Amendment and Restatement Agreement, and as amended, supplemented or otherwise modified from time to time, the “ Credit Agreement ”). The amendment and restatement of the Existing Credit Agreement pursuant to the Amendment and Restatement Agreement is conditioned upon, among other things, the execution and delivery of this Agreement. Parent is the parent company of the Borrower, will derive substantial benefits from the extension of credit to the Borrower pursuant to the Credit Agreement and is willing to execute and deliver this Agreement in order to induce the Lenders to extend such credit. The Subsidiary Guarantors are subsidiaries of the Borrower, will derive substantial benefits from the extension of credit to the Borrower pursuant to the Credit Agreement and are willing to execute and deliver this Agreement in order to induce the Lenders to extend such credit. Accordingly, the parties hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01. Credit Agreement. (a) Capitalized terms used in this Agreement and not otherwise defined herein have the meanings specified in the Credit Agreement.

(b) The rules of construction specified in Section 1.03 of the Credit Agreement also apply to this Agreement.

SECTION 1.02. Other Defined Terms. As used in this Agreement, the following terms have the meanings specified below:

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“ Claiming Party ” has the meaning assigned to such term in Section 3.02 of this Agreement.

“ Contributing Party ” has the meaning assigned to such term in Section 3.02 of this Agreement.

“ Credit Agreement ” has the meaning assigned to such term in the preliminary statement of this Agreement.

“ Credit Parties ” means (a) the Lenders, (b) the Agents, (c) the Issuing Banks, (d) the beneficiaries of the Borrower’s indemnification obligations under the Credit Agreement and (e) the successors and assigns of each of the foregoing.

“ Guarantors ” means Parent and the Subsidiary Guarantors.

“ Obligations ” means the due and punctual payment by the Borrower of (a) the principal of and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, (b) each payment required to be made by the Borrower under the Credit Agreement in respect of any Letter of Credit, when and as due, including payments in respect of reimbursement of disbursements, interest thereon (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) and obligations to provide cash collateral, and (c) all other monetary obligations of the Borrower to any of the Credit Parties under the Credit Agreement and each of the other Loan Documents, including obligations to pay fees, expense reimbursement obligations and indemnification obligations, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding).

“ Subsidiary Guarantor ” means, at any time, any Subsidiary Loan Party that is party to this Agreement at such time, except any such Subsidiary Loan Party the Guarantee hereunder of which has been released and terminated in accordance with the terms of this Agreement. The initial Subsidiary Guarantors are listed on Schedule A.

SECTION 1.03. Restatement . This Agreement amends and restates the Existing Guarantee Agreement in its entirety.

ARTICLE II

Guarantee

SECTION 2.01. Guarantee. Subject to the limitations set forth herein,

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each of the Guarantors unconditionally guarantees, as a primary obligor and not merely as a surety, the due and punctual payment of the Obligations. Each of the Guarantors further agrees that the Obligations may be extended or renewed, in whole or in part, without notice to or further assent from it, and that it will remain bound upon its guarantee notwithstanding any extension or renewal of any Obligation. Each Guarantor waives presentment to, demand of payment from and protest to the Borrower of any of the Obligations, and also waives notice of acceptance of its guarantee and notice of protest for nonpayment. Notwithstanding any other provision of this Agreement, the maximum liability of the Bloomingdale’s Parties with respect to the Obligations under this Agreement at any time of determination shall be limited to the difference of (a) the maximum liability that the Bloomingdale’s Parties may have under this Agreement without causing Bloomingdale’s to fail to be in compliance with Section 26.15 of the Bloomingdale’s Lease minus (b) $10,000,000.

SECTION 2.02. Guarantee of Payment . Each of the Guarantors further agrees that its guarantee hereunder constitutes a guarantee of payment when due and not of collection, and waives any right to require that any resort be had by the Paying Agent or any other Credit Party to any security held for the payment of the Obligations or to any balance of any deposit account or credit on the books of the Paying Agent or any other Credit Party in favor of the Borrower or any other Person.

SECTION 2.03. Limitations. (a) Except for (x) termination of a Guarantor’s obligations hereunder as expressly provided in Section 4.10 and (y) the limitations with respect to the Bloomingdale’s Parties set forth in Section 2.01, the obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense or set-off, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Guarantor hereunder shall not be discharged or impaired or otherwise affected by (i) the failure of the Paying Agent or any other Credit Party to assert any claim or demand or to enforce any right or remedy under the provisions of any Loan Document or otherwise; (ii) any rescission, waiver, amendment or modification of, or any release from any of the terms or provisions of, any Loan Document or any other agreement; (iii) the release of any security held by the Paying Agent or any other Credit Party for the Obligations or any of them; (iv) any default, failure or delay, wilful or otherwise, in the payment of the Obligations; or (v) any other act or omission that may or might in any manner or to any extent vary the risk of any Guarantor or otherwise operate as a discharge of any Guarantor as a matter of law or equity (other than the payment in full in cash of all the Obligations). Each of the Guarantors expressly authorizes the Credit Parties to take and hold security for the payment and performance of the Obligations, to exchange, waive or release any or all such security (with or without consideration), to enforce or apply such security and direct the order and manner of any sale thereof in their sole discretion or to release or substitute any one or more other guarantors or obligors upon or in respect of the Obligations, all without affecting the obligations of any of the Guarantors hereunder.

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(b) To the fullest extent permitted by applicable law, each Guarantor waives any defense based on or arising out of any defense of the Borrower or the unenforceability of the Obligations or any part thereof from any cause, or the cessation from any cause of the liability of the Borrower, other than the payment in full in cash of all the Obligations. The Paying Agent and the other Credit Parties may, at their election, foreclose on any security held by one or more of them by one or more judicial or nonjudicial sales, accept an assignment of any such security in lieu of foreclosure, compromise or adjust any part of the Obligations, make any other accommodation with the Borrower or exercise any other right or remedy available to them against the Borrower, without affecting or impairing in any way the liability of any Guarantor hereunder except to the extent the Obligations have been paid in full in cash. To the fullest extent permitted by applicable law, each Guarantor waives any defense arising out of any such election even though such election operates, pursuant to applicable law, to impair or to extinguish any right of reimbursement or subrogation or other right or remedy of such Guarantor against the Borrower or any security.

SECTION 2.04. Reinstatement. Each Guarantor agrees that its guarantee hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Obligation is rescinded or must otherwise be restored by the Paying Agent or any other Credit Party upon the bankruptcy or reorganization of the Borrower or otherwise. The provisions of this Section 2.04 shall survive any termination or release under Section 4.10.

SECTION 2.05. Agreement To Pay; Subrogation. In furtherance of the foregoing and not in limitation of any other right that the Paying Agent or any other Credit Party has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Borrower to pay any Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, each Guarantor hereby promises to and will forthwith pay, or cause to be paid, to the Paying Agent for distribution to the applicable Credit Parties in cash the amount of such unpaid Obligation. Upon payment by any Guarantor of any sums to the Paying Agent as provided above, all rights of such Guarantor against the Borrower arising as a result thereof by way of right of subrogation, contribution, reimbursement, indemnity or otherwise shall in all respects be subject to Article III.

SECTION 2.06. Information. Each of the Guarantors assumes all responsibility for being and keeping itself informed of the Borrower’s financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Obligations and the nature, scope and extent of the risks that such Guarantor assumes and incurs hereunder, and agrees that none of the Paying Agent or the other Credit Parties will have any duty to advise such Guarantor of information known to it or any of them regarding such circumstances or risks.

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ARTICLE III

Indemnity, Subrogation and Subordination

SECTION 3.01. Indemnity . In addition to all such rights of indemnity and subrogation as each of the Subsidiary Guarantors may have under applicable law (but subject to Section 3.03), Parent and the Borrower jointly and severally agree that, in the event a payment in respect of any Obligation shall be made by any Subsidiary Guarantor under this Agreement, Parent and the Borrower shall indemnify such Subsidiary Guarantor for the full amount of such payment and such Subsidiary Guarantor shall be subrogated to the rights of the Person to whom such payment shall have been made to the extent of such payment.

SECTION 3.02. Contribution and Subrogation . Each Subsidiary Guarantor (a “ Contributing Party ”) agrees (subject to Section 3.03) that, in the event a payment shall be made by any other Subsidiary Guarantor hereunder in respect of any Obligation and such other Subsidiary Guarantor (the “ Claiming Party ”) shall not have been fully indemnified by Parent and the Borrower as provided in Section 3.01, the Contributing Party shall indemnify the Claiming Party in an amount equal to the amount of such payment multiplied by a fraction of which the numerator shall be the net worth of the Contributing Party on the date hereof and the denominator shall be the aggregate net worth of all the Subsidiary Guarantors on the date hereof (