In the Spotlight

News & Features
Thousands to lose job in Fingerhut shutdown
By Bill Catlin
Minnesota Public Radio
January 16, 2002

The parent company of Minnetonka-based Fingerhut says it is preparing to shut down the catalog retailer. Federated Department Stores says Fingerhut could stay open if a buyer could be found, but Federated doesn't expect to find anyone willing to buy the operation. Fingerhut employs 4,700 in Minnesota.

Fingerhut was founded in Minneapolis in 1948 by brothers Manny and William Fingerhut as a direct marketer of automobile seat covers. The brothers continually expanded their product lines and customer base through direct mail marketing by "putting the right products in front of the right customers at the right time."

Employees: Fingerhut Core Catalog business employs approximately 4,700 are located in Minnesota.

•Minnetonka headquarters: 710
•Plymouth photo studio: 50
•St. Cloud distribution center: 2,670
•Brooklyn Center call center (above): 330
•Plymouth data center: 415
•Eveleth call center: 365
•Mora: 45
•Monticello collection center: 90
•Johnson City, Tenn. telemarketing center: 815
•Piney Flats, Tenn. distribution center: 540

(Source: Fingerhut Corporation)

If Federated lays off 4,700, it would be the largest single layoff in state history.

Federated paid about $1.7 billion for Fingerhut in March 1999. That was when dot-coms were hot and e-commerce still held lots of promise.

Fingerhut had e-commerce expertise and a big order-fulfillment operation and was considered a desirable property. But e-commerce has largely been a washout and Fingerhut became a drain on its parent company. Federated also runs the Bloomingdale's and Macy's chains.

Fingerhut has nearly 2,700 workers in St. Cloud. Most of the rest are in the Twin Cities area, including the Minnetonka headquarters, which employs about 700.

Fingerhut has laid off hundreds of workers in the past as problems arose. Federated has taken a big hit with the failed merger.

The company says it's not ruling out selling Fingerhut, but says it's unlikely a buyer will be found given the highly specialized nature of the business and the current economic environment.

A spokeswoman says the company expects to find a buyer for three catalog operations run out of Arizona, which employ about 2,000.

Federated said it would provide severance and health care benefits to eligible employees and assured employees that their retirement benefits are safe. The company said it would make new commitments for grants totaling more than $500,000 to United Way organizations and other charities in the affected communities in Minnesota and Tennessee.

The 4,700 potential layoffs would be larger than the 4,500 cuts Northwest Airlines announced after the September terror attacks. State officials say the final tally was much lower than that.

John Fischer with the state Department of Trade and Economic Development says officials calculate average Fingerhut wages at about $10 an hour, versus about $35 at Northwest. Fischer says the Fingerhut layoff may have a lesser economic impact on the state, but it's still substantial.

Fischer says officials peg Fingerhut's payroll at more than $100 million.

More from MPR
  • Closure will hit St. Cloud hard
  • Tennessee to lose 1,300 jobs