A digest of daily news from DIRECT Newsline
June 11, 2002
Federated Department Stores agreed to sell major assets of its Fingerhut Cos. subsidiary to Fingerhut’s former owner, Ted Deikel. Along with a partner, Tom Petters, Deikel agreed to buy Fingerhut’s name, Web site, existing inventory, equipment and customer list. Also to be acquired are two distribution centers, a data center and the headquarters building in Minnetonka, MN. Financial terms weren’t disclosed. Deikel and Petters plan to integrate the catalog into their existing businesses.
The U.S. Supreme Court said it refused to hear an appeal by information bureau TransUnion that sale of consumer information generated from credit data is protected by the First Amendment to the Constitution. The decision marks the end of a decade-long fight between the Federal Trade Commission and TransUnion over interpretation of the Fair Credit Reporting Act. The Court did not give a reason for refusing to hear the case.
Lowe Live London, an advertising agency, merged with direct response agency DraftWorldwide UK. Terms were not disclosed. The unit will be renamed DraftWorldwide London. Four managing partners will lead the new entity: Tony Watson, Ian Taylor and Nick Young from Lowe Live, and Sez Maxted from DraftWorldwide Oxford, a division of DraftWorldwide UK.
June 10
The Financial Services Regulatory Relief Act (HR-3951) was passed by the House Finance Committee. The bill would permit holding companies with less than a 25% stake in a bank, credit union or other financial services company to cross market to each others’ customers.
June 7
The Spiegel Group reported sales of $169.9 million for the four weeks ended May 25, a 24% decrease from $223 million for the same period last year. Total direct sales declined 27% for the month, and sales from the company’s e-commerce channel fell 3%. Specifically, sales dropped 23% at Eddie Bauer, 29% at Newport News and 22% at Spiegel catalog. Results were attributed to weak customer demand, lower catalog circulation and more stringent credit requirements for the Newport News and Spiegel catalogs. The company is predicting a $397 million net loss in fiscal 2001, compared with net earnings of $120.8 billion the year before.
June 6
Advo Inc. acquired Toronto-based FACC Corp, which includes both First Avenue and Breezeway Communications. Terms of the deal were not disclosed. This is the first international acquisition in Windsor, CT-based Advo’s 73-year history.
June 4
Impower emerged from bankruptcy with a settlement to pay creditors one-third of what they were owed, and a plan to reach profitability in six months. Impower, an American List Counsel (ALC) spinoff formed in 1998 to take on the list company’s interactive business, filed for Chapter 11 bankruptcy protection on Aug. 3, 2001. It owed about $26 million to approximately 800 unsecured creditors, including a claim from the largest creditor — ALC — for $13 million.
The Spiegel Group’s Class A Common stock was delisted from the Nasdaq National Market System based on the company’s filing delinquencies and other public interest concerns.
June 3
USA Interactive, an online marketing firm, will acquire online time-share vacation marketer Interval International for approximately $578 million in cash and stock.
May 31
Five former database marketing executives at Fingerhut catalog formed database marketing services company Decision Intelligence Inc. Randy Erdahl, Bill Flach, Deb Campbell, Colleen Theisen and Matt Redlon founded the Minneapolis-based firm.
May 30
The Spiegel Group and MBIA Insurance Corp. settled their lawsuit over a planned $20 million payout, which Spiegel argued would have harmed Spiegel and its credit card unit. MBIA, which insures FCNB’s payments to noteholders, agreed to withdraw its letter declaring the “payout event.”
Cross Media, the multi-channel marketing company, completed its acquisition of JWE Enterprises. Based on the purchase, Cross Media is projecting $210 million in revenue for this year, compared with the original estimate of $200 million. The purchase includes JWE’s 25% interest in J Cross Marketing, a joint venture between the two firms.
May 24
Both ClickAction Inc. and Engage Inc. have been notified by Nasdaq that they did not meet requirements for continued listing on the National Market System and are subject to delisting. Both companies said they failed to comply with the $1 minimum bid price required for continued listing.
May 23
Volvo Cars of North America LLC has tapped Euro RSCG MVBMS Partners to provide full-service direct marketing. The budget is 15% of Volvo’s overall $93 million budget, or about $14 million. Volvo’s direct marketing was formerly handled by VSI Holdings, Bloomfield Hills, MI.
May 22
Abercrombie & Fitch has come under attack once again for its racy marketing tactics. This time, the firm is marketing thong underwear in children’s sizes at its Abercrombie stores with words like “eye candy” and “wink wink” printed on the front. The stores target children 7 to 14.
Damart UK, England, has discontinued its U.S. catalog offering comfortable, warm underwear and clothing for men and women after response and revenue trailed off.
Lillian Vernon Corp. has named Richard P. Randall, the firm’s former CFO, as executive vice president. He will also serve as COO and CFO.
May 17
Illinois could become the first state to ban telemarketing calls to cell phones. In the next month, Gov. George Ryan is expected to sign a bill into law that would ban unsolicited telemarketing calls to cell phones and one that would create the state’s first telemarketing do-not-call registry. Both measures, sponsored by Republican State Sen. Todd Sieben, won the approval of state lawmakers earlier this week. The cell phone calling ban would go into effect Jan. 1, 2003.
Fingerhut Cos. Inc has suspended the rental of its customer file pending the sale of the company’s assets. The file had 4.1 million active buyers at the time Fingerhut’s parent, Federated Department Stores Inc. announced in January that it would liquidate the catalog company. That number has likely dwindled by now as catalog operations were curtailed over the last several months.