EDEN PRAIRIE (AP) -- A Twin Cities businessman is exploring a purchase of Fingerhut Cos., the catalog company and large Minnesota employer on the verge of being closed by its parent, Federated Department Stores Inc.
Tom Petters, a veteran operator of wholesale and retail companies that specialize in closeout goods, is setting up meetings with investors and city and state officials and may prepare a bid.
Petters, who is now chairman and chief executive officer of Eden Prairie-based Redtag Inc., told the Star Tribune of Minneapolis he contacted Federated's investment bankers. "We're considering it," he said.
Petters earlier in the day spoke with the mayor of St. Cloud, where Fingerhut's largest operation is based, and arranged a meeting next week to discuss financial incentives the city and state of Minnesota may be able to provide.
Federated on Wednesday said it planned to close Fingerhut unless a buyer emerges. Federated, the Cincinnati-based operator of department stores like Bloomingdale's and Macy's, said the recession, changing valuation of e-commerce businesses and credit problems hurt Fingerhut's financial performance.
Fingerhut, one of the nation's largest catalog retailers, has 4,700 workers in Minnesota and 1,300 in Tennessee. It employs 2,700 at a warehouse and distribution center in St. Cloud, where it is the largest corporate employer.
St. Cloud Mayor John Ellenbecker said Petters called him Friday morning to discuss a potential buyout. "It was my understanding from our conversation he would intend to operate it as it has been," Ellenbecker said on Twin Cities Public Television Friday night.
A local development incentive already is attached to part of Fingerhut's St. Cloud operation, and Ellenbecker told the St. Cloud Times he will look to the state for additional help.
After St. Cloud, Fingerhut's largest concentration of workers is at a telemarketing and distribution centers in eastern Tennessee, where it employs 1,300.
Fingerhut has 710 people at its headquarters in Minnetonka, 415 at a data center in Plymouth, 365 at a call center in Eveleth, 330 at a call center in Brooklyn Center, 90 at a collections call center in Monticello, 50 at a photo studio in Plymouth and 45 at Mora Graphics.
Petters previously started Petters Co., a wholesaler, and Petters Warehouse Direct, a retail chain specializing in liquidation and refurbished merchandise. He retains ownership stakes in both firms but doesn't participate in day-to-day operations of Petters Warehouse.
In 1998, he started Redtag as an online seller of closeout goods and other merchandise. In 2000, he narrowed the company's focus to wholesale transactions. Redtag sells both closeout and regular goods, ranging from cookware to computer monitors.
Petters has also worked closely with Theodore Deikel, former chief executive of Fingerhut and son-in-law of the company's founder. Deikel took Fingerhut public in 1990 and presided over its sale to Federated in 1999.
Deikel invested in Redtag and served on its board for a time. Deikel is now chairman and chief executive officer of BoomBuy Inc., an Internet retailing firm based in Sausalito, Calif. BoomBuy bought Redtag's business-to-consumer division in November 2000.
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