Fingerhut Sale Still Possible
May. 17, 2002
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CINCINNATI (AP) _ Even though some employees of its Fingerhut online retailing business have been laid off, it is not too late for a potential buyer to purchase the operation, the chief executive of Federated Department Stores Inc. said on Friday.
James Zimmerman, who also serves as Federated's chairman, said he still does not know whether the retailer will sell Minnetonka, Minn.-based Fingerhut in one or several pieces.
``Which of those is going to come true, we just don't know yet,'' Zimmerman said after Federated's annual shareholders meeting. ``At this point, it's just a matter of seeing what the final action will be.''
Zimmerman's spoke after one plan to sell the company fell through while another bid has been put together by a team that includes a former Fingerhut owner.
Zimmerman acknowledged the persistent and conflicting reports out of Minnesota about what will happen to the business. He said he attributes that to speculation from politicians and union leaders trying to save Fingerhut jobs.
``It's out of proportion,'' he said.
Federated, operator of such chains as Macy's and Bloomingdales, bought Fingerhut in 1999 for $1.7 billion, hoping that the acquisition would boost Federated's Internet sales. The retailer said on Jan. 16 that it would close the money-losing operation unless a buyer was found.
``Like the country, we learned that it was not as big an opportunity as we thought,'' Zimmerman said. But he said Federated still considers online sales to be important.
Federated's online operations include Macys.com to support its prominent Macy's department stores.
Minnesota wholesaler Tom Petters said he and former Fingerhut owner and chief executive Ted Deikel have submitted a bid to buy Fingerhut. The two are friends who have invested in each other's businesses.
It wasn't immediately clear what the bid will mean for the thousands of Fingerhut workers in Minnesota who have been laid off or stand to lose their jobs in the coming months.
Petters declined to discuss details late Thursday other than to say that it would include integrating Fingerhut assets with existing businesses, which range from e-commerce to wholesaling.
Fingerhut stopped accepting catalog and Internet orders on Thursday. The 54-year-old company has not mailed a catalog since mid-January.
Talks to sell the entire business to a group led by turnaround specialist Peter Lytle fell apart last week after financing could not be secured.
Fingerhut had employed 4,700 people in Minnesota, including 2,700 in St. Cloud and 1,500 in the Twin Cities. Its payroll in the state is down to about 2,600 people, with about 1,600 of those workers in St. Cloud. It also has laid off 900 workers in Tennessee.
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