Fingerhut Calls for Bids on Assets

Fingerhut moved a step closer to shutting down by inviting liquidators to bid on its assets.

The Minnetonka, Minn.-based catalog retailer sent a letter Friday calling for bids to a group of more than 40 liquidation companies and asset resellers. The letter set May 22 as the deadline for bidding.

The letter from Beth Logsdon, Fingerhut’s vice president of merchandising operations, calls for two bids--one for an estimated $55 million to $65 million worth of product merchandise and the other for the equipment and fixtures at various Fingerhut facilities.

Ben Saukko, a spokesman for Fingerhut, said Sunday he was unaware the letters had been sent and had no further comment.

The call for bids surprised Tom Petters, an Eden Prairie, Minn.-based wholesaler who, along with former Fingerhut Chief Executive Ted Deikel, has been negotiating to buy a portion of Fingerhut from Federated Department Stores.

“I didn’t know this letter had gone out,” Petters said. “I’m surprised that this many people were invited in.”

Petters and Deikel declined to comment on how the Fingerhut invitation to liquidators might affect their negotiations.

The 54-year-old business has 3,100 workers, including 2,600 in Minnesota. Fingerhut has laid off 2,400 people in Minnesota and 900 in Tennessee.

The invitations to liquidators didn’t surprise Minnesota Atty. Gen. Mike Hatch, who has been monitoring efforts to revive Fingerhut after Federated announced Jan. 16 that it would close the company unless a buyer was found.

“It’s not good news, but it’s not inconsistent with what’s been happening,” he said. “I think Federated could still be selling the residual property necessary to restart Fingerhut to Deikel, yet be undergoing a liquidation.”

Hatch said Deikel told him last week that negotiations to buy a portion of the Fingerhut assets were continuing, but that restarting the business would be difficult considering the amount of time that has elapsed since Federated announced Fingerhut’s closure.

Negotiations between Fingerhut and Wayzata businessman Peter Lytle ended last week. Lytle said a sluggish economy hampered his ability to complete a purchase.

Union leaders criticized the call for bids.

“That’s the route that we were always pushing them to stay away from,” said Jane Palmbach, a leader of the Union of Needletrades, Industrial and Textile Employees. She said it was “totally inappropriate” for the firm to pursue liquidation while in talks.