Announcement by Federated expected soon
By Karren Mills
Associated Press
ST. PAUL, Minn. -- Most large companies surprise rivals, customers and shareholders when they announce a big transaction.
But few people will be surprised if Federated Department Stores Inc. announces progress in negotiations to sell its Fingerhut catalog subsidiary today.
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Federated, the Cincinnati-based owner of Macy's and Bloomingdale's, has been under political pressure in Minnesota since it announced last month it would close Fingerhut, one of the state's largest employers, if it couldn't find a buyer.
Fifteen potential buyers subsequently asked Federated for a look at Fingerhut's books. While Federated has kept negotiations secret as all companies do, Minnesota politicians have become increasingly confident a deal is near.
Sen. Paul Wellstone said Tuesday a Federated executive told him to expect an announcement soon. And state Trade and Economic Development Commissioner Rebecca Yanisch said Gov. Jesse Ventura told her that he got similar word from Federated Vice Chairman Ron Tysoe on Wednesday.
Federated officials didn't return a telephone call seeking comment Wednesday.
Two Minnesota businessmen, Peter Lytle and Tom Petters, have expressed interest in Fingerhut. Lytle, a business turnaround specialist from Wayzata, was out of town and unavailable Wednesday evening, his wife said.
Petters, owner of Petters Cos. and Redtag Inc. in Eden Prairie, didn't return a telephone message left at his home.
Fingerhut employs about 4,700 people in Minnesota, including nearly 2,700 in St. Cloud, where it's the city's largest employer.
Federated acquired Fingerhut in March 1999 for $1.7 billion, aiming to boost its e-commerce efforts. But the business soured as capital dried up for Internet ventures and debt problems grew among Fingerhut's customers.
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In 2000, Fingerhut became a $150 million drag on Federated's profits. For the first three quarters of the current fiscal year ending in November, Fingerhut's revenue was $810 million, down from $1.26 billion a year earlier.
