(Direct Newsline) Peter Lytle plans to hold onto all of the assets of Fingerhut Cos. and to keep existing senior staffers if his bid to purchase the company is successful, says Marshall Masko, Lytle’s partner in investment company Business Development Group (BDG). On Feb. 21, BDG announced it had signed a nonbinding letter of intent with Fingerhut parent company Federated Department Stores to acquire the general merchandise cataloger.
Cincinnati-based Federated said Jan. 16 that it would shut down the Minnetonka-based Fingerhut if it couldn’t find a buyer. Lytle and Masko plan to make a decision in early March about the purchase.
“The letter of intent we signed with Federated Department Stores Inc. essentially says that we are prepared to buy all of the substantial assets of Fingerhut and run it as an entity, and that includes [Fingerhut subsidiaries] Figi’s and Arizona Mail Order,” Masko says. “We would work with existing staff and work on stabilizing and rebuilding the company by focusing on its core competencies: direct marketing and catalogs.”
Masko, who has worked for years with business turnaround specialist Lytle, has a background in direct marketing. From 1990 to 1994, he was senior vice president of marketing at Nordic Track. “I understand what it takes to run a catalog business,” he says, adding that “building off existing staff” makes sense to him. “There’s a very talented group of people at Fingerhut, starting with Steve Lightman [executive vice president of catalog operations], who is a very capable man.”
Keeping employees in place throughout the company is also a goal. “It would be our objective to keep as many jobs as we can,” Masko says.
Fingerhut employs about 4,700 people in Minnesota; 3,000 at Figi’s in Wisconsin; 1,200 in Tuscon, AZ, at Arizona Mail Order; and 1,200 in Tennessee.
Wayzata, MN-based BDG will perform due diligence during the next two weeks on Fingerhut’s financial viability. Areas to be looked at include long-term business and catalog performance, inventory, legal transactions and the firm’s cash position.
“We believe it is viable and worth financing from what we’ve seen, but we have other things to look at,” Masko says.
After the BDG offer was announced, former Fingerhut CEO Ted Deikel and Eden Prairie, MN-based wholesaler Tom Petters revealed that they made a separate offer to Federated the same day. Under the nonbinding letter of intent, Federated is free to entertain other offers for Fingerhut. In published reports, Deikel and Petters said they’re offer will be good until March 8.
But Federated spokesperson Carol Sanger says, “There is no other offer for Fingerhut as a full entity. We have several other offers for bits and pieces.”