Twin Cities businessmen Tom Petters and Ted Deikel are officially Fingerhut's new owners. The two completed their acquisition of Fingerhut's assets Wednesday, more than a month after announcing a definitive agreement. The deal could save several hundred Fingerhut jobs that would have disappeared had Federated failed to find a buyer for Fingerhut.
The deal includes Fingerhut's distribution center in St. Cloud, its Minnetonka headquarters, its data center in Plymouth, a Tennessee facility, and the company's brand name, customer lists, inventory and Web site.
The Fingerhut Web site will become the linchpin in Petters' plan to integrate Fingerhut into his wholesale businesses, Red Tag and Boom Buy. Petters will now fulfill Red Tag and Boom Buy sales through Fingerhut's facilities, especially the distribution center in St. Cloud. Petters can't say yet how many jobs the new Fingerhut will employ.
"We certainly are going to be very careful, and not say things that can't happen," he says.
Petters says he wants to save "a lot of jobs," but wouldn't offer even a ballpark figure for fear of raising false hopes.
"All along the way - in the short period we've had to get the deal closed - we've not wanted to disappoint people. Nor did we want to encourage people, because we certainly plan on rebuilding the business. Just how we do that remains to be seen, because it's a different company today," says Petters.
Despite the uncertainty over employment levels, St. Cloud Mayor John Ellenbecker says it's a happy end to a frustrating several months.
"You certainly had doubts. Because it was a very difficult process - never quite understanding what Federated's motivation was. But it never occurred to me that we should look at this as the glass being half-empty," says Ellenbecker. "This should always be approached as being a situation where we want to encourage people to come in and see the value of these assets, and the value of having a motivated, trained workforce to staff them."
In another deal earlier this month, Atlanta-based Compucredit bought $1.2 billion in Fingerhut customer debt, taking on 850 Fingerhut workers. That cut Fingerhut's total workforce to more than 800.
Now, in a strange twist, all of Fingerhut's current employees will still lose their jobs. But many will be able to re-apply for their old jobs after Petters and Deikel take control of Fingerhut's assets. Petters says he wouldn't have done the deal if not for the workers.
"It's wonderful when you have entrepreneurs - and actually even past owners - having the confidence to know that there's still a niche for Fingerhut, not only in the state but nationally."
- Rebecca Yanisch, commissioner of Trade and Economic Development
"One of the primary reasons we were attracted to this deal was the people. If you were just looking at a bunch of buildings, it wouldn't have been such an attractive deal," he says.
Petters' partner Ted Deikel will now meet with Fingerhut executives to discuss the shape of the new company.
This is the third time that Ted Deikel has owned all or part of Fingerhut. Deikel led Fingerhut from 1974 to 1984, and again from 1990 to 1999. In 1999, Deikel sold Fingerhut to Federated for $1.7 billion.
Federated announced in January that it would shut down Fingerhut if it couldn't find a buyer. Now, Deikel and Tom Petters are buying it back, most likely for a fraction of that price. Terms of the deal were not disclosed.
State Commissioner of the Department of Trade and Economic Development, Rebecca Yanisch, says the deal means the state will retain an important business.
"When you look at the history of Fingerhut in Minnesota, it has been very much a long-term operation. And the announcement in January certainly struck a lot of people very hard. It's wonderful when you have entrepreneurs - and actually even past owners - having the confidence to know that there's still a niche for Fingerhut, not only in the state but nationally," says Yanisch.
Petters says he and Deikel will know better just what the business will look like, and how many people it will employ, within 30 to 60 days.More from MPR