If you first don’t succeed…
On May 23, Federated Department Stores signed a nonbinding letter of intent with former Fingerhut chairman/CEO Ted Deikel and partner Tom Petters for the purchase of certain Fingerhut Cos. assets, “subject to the negotiation of a definitive purchase agreement.” The agreement comes less than three weeks after its proposed sale of Fingerhut to Business Development Group Acquisitions (BDGA) fell through.
The assets Deikel and Petters have agreed to buy include Fingerhut’s distribution center and other additional facilities in St. Cloud, MN; its Minnetonka, MN, headquarters; a data center in Plymouth, MN; a distribution center in Piney Flats, TN; and the Fingerhut name, Website, and existing inventory.
There’s no specific time frame for closing the deal, says Federated spokesperson Carol Sanger. “It will take some time to negotiate the definitive agreement because that’s the nature of these things,” she says.
Federated will suspend its ongoing liquidation of Fingerhut inventory pending negotiations on a final agreement. No further layoffs will take place either, Sanger says, until the fate of the deal is clear.
“This represents clear progress toward our objective of disposing of the Fingerhut business,” Federated vice chairman Ronald Tysoe said in a statement, “and we are pleased that the buyers have indicated a desire to rehire a number of Fingerhut employees. Although both parties still must come to terms on a final purchase agreement, we are hopeful that we will be able to do so, and Federated is prepared to move as quickly as possible to get this done.”
Deikel has been working with Petters, who runs the RedtagBiz wholesale business in Eden Prairie, MN, since Federated signed its letter of intent with BDGA earlier in February. At that time, Deikel and Petters had already offered to buy parts of Fingerhut. BDGA had offered to buy the entire Fingerhut business, including the Figi’s, Arizona Mail Order, and Popular Club catalogs.
“This is a much smaller deal,” Sanger says, referring to the failed BDGA deal. “The other deal was a turnkey arrangement; this is for specific assets as opposed to the entire operation.”