Fingerhut gets a bid
February 25, 2002-- Home Textiles Today,
Cincinnati — Federated Direct experienced a week of shake-ups as the departure of the Federated Department Stores division chief resulted in a shift in executive responsibilities and a suitor turned up for the troubled Fingerhut business.
Stepping forward with a non-binding letter of intent for direct marketer and cataloger Fingerhut, which Federated announced it would jettison in mid-January, is Business Development Group Acquisitions Inc. (BDGA), Wayzata, MN, a management firm that specializes in corporate turnarounds.
BDGA chairman Peter Lytle made a foray into the home textiles industry in 1998, when he acquired blanket and throw manufacturer Faribault Mills in 1998. The mill was unable to hold onto its market share, however, and over the subsequent two years saw nearly one-third of its sales evaporate. Lytle sold the company in late 2000 and moved onto other turnaround ventures.
BDGA is working to put together financing for the Fingerhut deal and must notify Federated in early March of its ability to proceed with the offer. Ronald Tysoe, Federated's vice chairman, said the retailer is not holding active discussions with any other parties regarding Fingerhut, although the sale process remains open.
In the meantime, Federated Direct chairman and ceo Jeffrey Sherman has resigned effective March 1 to become ceo of the Limited Stores division of Limited Inc.
Tysoe will assume the responsibilities for the Fingerhut component of Federated Direct. Michael Sherman, Fingerhut president, will report directly to Tysoe and, along with Steven Lightman, executive vp of Fingerhut catalog operations, will be responsible for Fingerhut operations.
Dawn Robertson will head Federated Direct, which is also responsible for the operations of macys.com and Bloomingdale's By Mail. After March 1, Robertson, who has served as the division's president and chief merchandising officer since 1999, will report to Susan Kronick, Federated group president.
Kronick, currently responsible for the company's regional department stores — The Bon Marché, Burdines and Rich's/ Lazarus Goldsmith's — will oversee all the bridal and gift registry business. She will continue in her current responsibilities as well.
Sherman joined Federated in 1971 at Bloomingdale's, and advanced to become president and coo in 1989. He served as chairman and ceo of Federated Direct since March 2000.
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