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Fingerhut anniversary recalls tumultuous year
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Technically the name has changed, but the old signs remain. Fingerhut is now "Fingerhut Direct Marketing," a subsidiary of the privately-held Deikel Petters Group. (MPR Photo/Jeff Horwich)
One year ago, Federated Department Stores announced its Fingerhut subsidiary would probably close in a matter of months. The announcement began a season of uncertainty for workers in St. Cloud, Minnetonka, Mora and other communities where the catalog retailer had set up shop.

St. Cloud, Minn. — Today the Fingerhut name survives. The company is now known as "Fingerhut Direct Marketing," and its second new catalog went out this week. But the economic upheaval of the past year is far from over.

Federated bought the catalog retailer in 1999. The owner of Macy's and Bloomingdales hoped to score big during the e-commerce boom. Instead Fingerhut was losing millions. At first Federated was openly skeptical about finding a buyer.

The company employed 4,700 people in Minnesota, and the reaction was strong. This was especially true in St. Cloud, where Fingerhut was one of the city's largest employers with almost 2,700 workers.

Some good news came in June when Federated sold Atlanta-based Compucredit the right to collect Fingerhut's consumer debt. That deal saved 800 jobs in St. Cloud and Monticello when Compucredit decided to move some operations to Minnesota.

And after six months of union rallies, lawsuits, and one aborted bid, Federated closed a deal with two Minneapolis businessmen for Fingerhut itself, and most of its assets.

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Image Holly Fiecke left in April, returned in November

But by that time the catalog company had essentially shut down. We first talked to Dan and Holly Fiecke while the deal was still tenuous. Holly had already lost her job as an order picker. Dan was still driving a forklift. At the time, Dan said he expected his job might last for a few more months.

"We don't know what we're going to do, if we're going to have to sell everything and move or what," he said. "It really stinks, you know. Life is pretty much just on-hold."

One year after the initial closure announcement things are more stable, but not necessarily better. Dan works for a lumberyard in Pierz. The wage is lower, and his limited health insurance offers no protection for Holly or their two children. The mortgage on their house near Royalton has eaten away at their savings.

Holly brushed up on her computer and office skills at the Workforce Center in St. Cloud. Special grants expanded the programs for victims of Fingerhut layoffs. But the central Minnesota job market has been weak.

"I've put in applications and didn't hear back from a lot of places," she says. "I need to find something that's full-time and has benefits, and I couldn't find anything like that."

She struggled with whether to take part-time work, but didn't. Not until November, when she went back to work at Fingerhut. The new owners, Ted Deikel and Tom Petters, have rehired a small number of workers through a temp agency, though they won't say how many. Holly says she's glad to be back alongside many former colleagues, and describes the operation as more computer-automated than under Federated, but "just a real small version of what it used to be."

The company put out a new catalog for the holidays, and for a while Holly was working full-time. Now she's back to a few hours a day. Most of Holly's coworkers are also part-time and lack benefits.

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Image Union head Jane Palmbach

Jane Palmbach hopes to change that. Later this month the local president of the Fingerhut workers' union, the Union of Needletrades, Industrial and Textile Employees, will sit down for the first time to bargain with Fingerhut's new owners. On her agenda: restoring health care, pensions, and competitive wages.

Palmbach says Fingerhut's future success rests on three factors that bode well for the company: The customer base is in place; hundreds of experienced workers like the Fieckes are ready and willing to come back; and new owner Ted Deikel has already run this company twice before.

"That business model was designed by Ted Deikel, and if anybody understands that business model, it's him," Palmbach says. "He certainly had a niche in the market and knows how to advertise and sell to that niche, and he's sticking with model. So it's a business he knows well."

St. Cloud and state officials hope she's right. In a recent report, two local economists all but blamed the Fingerhut shutdown for making St. Cloud's economy, in the words of St. Cloud State University's Mark Partridge, "the laggard of the upper midwest." Of 750 former workers who enrolled in the local Workforce Center, fewer than 300 have found jobs. Just 30 of them have gone back to work at the new Fingerhut Direct Marketing.

A spokeswoman for Fingerhut's new owners declined to talk on tape. Mary Pernula is loathe to speculate about the company's prospects, beyond saying the response to the November catalog leaves them "cautiously optimistic." Under Fingerhut's credit-based system, nothing will be clear until payments on holiday orders come due in March. Pernula underscores the Deikel-Petters group is building the business "carefully and methodically." Unlike Federated Department Stores, the Deikel-Petters Group is a privately held company under no compulsion to discuss the company's internal workings.

On the question of jobs—how many there are, how many there might be—Pernula has nothing to say. She says only that the number fluctuates from week to week, and that numbers previously reported in the press, often attributed to union officials, have been wrong. After a year of ups and downs, the company refuses to play a game of expectations with the media and the public.

Nonetheless, the expectations remain.

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