The possible store closures could reduce vendors' sale and operating margins. Companies "with large reliance on the combined [Federated-May] entity face significant challenges likely to pressure margins and financial returns [long term]," the report says.

But the closure of underperforming stores could also speed up inventory turnover, especially for some companies like watch and accessory seller Fossil, the report says. Estee Lauder could also benefit from the elimination of underproductive beauty products departments.

In the footwear department, more vendors could have opportunities to sell products at the Federated-May stores because executives at the new entity would not likely want to rely on a small number of suppliers. Kenneth Cole, Timberland and Wolverine World Wide could all strengthen sales after such a move.