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State officials step in to move Fingerhut sale along
By Marisa Helms
Minnesota Public Radio
January 25, 2002
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Representatives of Federated Department Stores told Minnesota's political leadership the company will entertain selling its catalog-based subsidiary Fingerhut. Concerns have been raised the company would simply liquidate Fingerhut instead of negotiate a sale. If Fingerhut closes, about 4,700 Minnesotans would lose their jobs, in what would be the single biggest job loss in the state's history. Since Federated announced the possible closure, at least three potential investors have expressed interest in buying Fingerhut. Attorney General Mike Hatch brought all parties together to his office Thursday night, to send a message the state wants to do what it can to keep Fingerhut in business.

After the meeting in the attorney general's office, St. Cloud Mayor John Ellenbecker said he's more optimistic than ever that Federated will sell the company.

"Clearly they indicated that they are a serious, willing seller and they will entertain any serious offer. And, I'm confident now that that message has been conveyed," Ellenbecker said.

St. Cloud stands to be the biggest loser should Fingerhut close down. Fingerhut's St. Cloud distribution center employs 2,700 people.

There are at least three interested buyers, including two Twin Cities businessmen. But all sides agree, a sale is not imminent.

Senate Majority Leader Roger Moe emerged from the meeting and declared it a first step in a long process.

House Majority Leader Tim Pawlenty said his presence, and that of Sen. Moe, was meant to send a strong message - the state is willing to do what it can for Fingerhut employees.

"We stand ready to help the workers, and mitigate some of the impacts if there turns out to be a layoff or a liquidation," Pawlenty said. "But at this point, this is really a business transaction. The heart of this is really going to be business people trying to figure out if they can do a business deal."

At least 1,000 of Minnesota's Fingerhut employees are members of the Union of Needletrades, Industrial and Textile Employees, AFL-CIO. Union Vice President Noel Beasely charged Federated with not caring about Fingerhut employees. He said Federated wants to shut down Fingerhut as a way to impress Wall Street.

"If Federated fast-tracks the liquidation process and doesn't allow sufficient time for us to find a viable buyer for the company, then we would intend to expose this transaction for the venal act that we believe it to be," Beasely said. "We will take that to consumers and educate consumers on that issue, and consumers will draw their own conclusions about where they prefer to shop after that."

Federated executives and the potential investors avoided reporter questions. And Attorney General Hatch let the legislators speak on his behalf. Gov. Jesse Ventura was not at the meeting.

So far, there is no indication the state is putting any kind of monetary or tax incentives on the table. Rep. Pawlenty says it's now time for investors and Federated to start crunching the numbers. No further meetings have been scheduled.

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