It’s official: Federated Department Stores has reached a definitive agreement to sell Fingerhut.
Yesterday Federated announced that FAC Acquisitions, led by Thomas Petters and former Fingerhut CEO Ted Deikel, agreed to buy Fingerhut’s name, Website, existing inventory, and Minnetonka, MN, headquarters; its distribution centers in St. Cloud, MN, and Piney Flats, TN; and its data center in Plymouth, MN. The sale is expected to be finalized within a few weeks.
Terms of the deal were not disclosed. But the St. Paul “Pioneer Press” estimates the price as less than $500 million, since the sale does not include Fingerhut’s accounts receivable, worth an estimated $1 billion. The sale also does not include Fingerhut’s subsidiary catalogs, among them food mailer Figi’s and apparel titles Arizona Mail Order, Lew Magram, and Bedford Fair.
At a news conference following the announcement, Petters said that he and Deikel would try to integrate Fingerhut into their existing companies: discount online shopping club BoomBuy and wholesaler RedtagBiz.
Federated officially put Fingerhut up for sale in January. At the same time, it began planning to close the business by this summer, should no buyer materialize. An earlier bid to buy Fingerhut and all its subsidiaries, led by Peter Lytle, fell through last month. More than half of Fingerhut’s 6,000 employees have been laid off since January. Petters expects to rehire at least some of them, though he couldn’t yet specify how many.