Federated Department Stores Inc., Cincinnati, announced yesterday an agreement to sell to credit card company CompuCredit Corp., Atlanta, about $1.2 billion of Fingerhut receivables, a deal that also includes the assumption of $450 million in receivables-backed debt that has been issued by the Fingerhut Master Trust.
Terms were not disclosed.
CompuCredit intends to retain more than 800 Fingerhut employees servicing the receivables portfolios at the company's St. Cloud and Monticello, MN, credit facilities.
“We expect to be able to complete this transaction within the next month,” Ronald W. Tysoe, Federated's vice chairman, said in a statement.
The company reiterated its prior expectation that the disposition and monetization of Fingerhut's assets will generate $1.1 billion to $1.3 billion of after-tax cash proceeds, net of one-time costs.
Federated announced in January its intention to close or sell the cataloger. Fingerhut employed about 6,000 people, including 4,700 in Minnesota and 1,300 in Tennessee. Subsequent layoffs have lowered the number. Companywide employment has fallen from 2,230 at the end of May to 1,730.
Former Fingerhut chief executive Ted Deikel and Tom Petters, principals of FAC Acquisitions LLC, announced about two weeks ago an agreement to acquire parts of Fingerhut, including its name, Web address, headquarters in Minnetonka, MN, distribution center and other facilities in St. Cloud, and the distribution center in Piney Flats, TN, as well as a data center in Plymouth, MN, and existing inventory.
The Associated Press reported that Petters and Deikel would try to integrate Fingerhut into their existing companies: BoomBuy, a discount online shopping company; and Redtag Inc., Eden Prairie, MN, a consumer goods wholesale exchange.
Fingerhut catalog subsidiaries Arizona Mail Order, Figi's and Popular Club Plan remain for sale.
“There are some interested parties, and they are working through that process,” Fingerhut spokesperson Ben Saukko said when asked about the subsidiaries.
Saukko provided no information regarding the timing of an announcement for finalizing the sale to FAC Acquisitions LLC.
“We haven't given out a date on when that deal might be closed,” he said. “They are just working through the process, and they are working as fast as they can. But these deals take time to work out the details.”
Federated vice president of corporate affairs Carol Sanger was unavailable for comment yesterday. Mary Pernula, vice president of public relations at Redtag, did not return a call for comment.
It is rumored that the deal may not close until after the July 4 holiday.