The divorce between Federated Department Stores Inc., Cincinnati, and Fingerhut became final yesterday.
Federated finally rid itself of the company that was once a giant in the catalog industry as it closed the transaction for the sale of Fingerhut assets to FAC Acquisitions LLC, in which Tom Petters and former Fingerhut chief executive Ted Deikel are principals.
A definitive agreement was signed last month by the parties.
Terms were not disclosed.
Assets include the distribution center and other facilities in St. Cloud, MN; the subsidiary's Minnetonka, MN, corporate headquarters; the data center in Plymouth, MN; the distribution center facility in Piney Flats, TN; and the Fingerhut name, customer lists, Web site and inventory along with other property and equipment.
Fingerhut receivables were sold to CompuCredit Corp., which was announced July 12.
Petters and Deikel will start the process of developing a new Fingerhut business during the next 30 to 60 days.
“It's too early to tell,” said Mary Pernula — vice president of public relations at Redtag Inc., an Eden Prairie, MN, wholesale exchange run by Petters for firms that sell consumer merchandise — when asked how the new Fingerhut would be constituted. “That's what they are going to start concentrating on at this point. The old Fingerhut is gone, and we don't know exactly what a new Fingerhut could look like.
“We're looking at direct marketing, [but] it's way too early to talk about details about how it could be structured.”
The CompuCredit deal was mentioned when she was asked about the difficulties that must be overcome.
“[One of the] major challenges is the fact that the accounts receivables were sold to someone else, and all the implications that go along with that,” she said. “That's a hurdle.”
A small team of former Fingerhut executives will create plans for a new Fingerhut direct marketing business. Pernula did not have a number when asked how many former executives would be involved.
She also did not know when the new Fingerhut would launch. The number of employees to be rehired “cannot be determined until further analysis and development of a business plan is complete,” according to a statement.
Fingerhut's integration with existing businesses also will take place. In addition to being a principal of FAC Acquisitions, Petters' businesses include The Petters Companies, Redtag and BoomBuy.
“We're going to use some of the assets that we are acquiring, such as warehouses and other assets, to integrate with our businesses where it makes sense,” she said.
