Federated Department Stores Inc., Cincinnati, confirmed reports that it is exploring a number of alternatives for its Fingerhut subsidiary, as reported last Thursday.
These actions include scaling back the unit’s operations, selling it outright, or even breaking up Fingerhut’s assets and keeping its database management and distribution facilities. “That, from day one, has been the value for us. We did not buy it for the catalog,” said spokeswoman Carol Sanger.
But Sanger also said that yesterday’s report, that the company was considering a wide range of actions, were “nothing new” and that it will be several months before the firm reaches a decision.
“The impact on long-term cash flow will be a prime consideration,” she said. “We are focused on fixing the credit delinquency problem.”
In July Fingerhut reported that it would take a charge of between $150 and $250 million to combat increased debt resulting from looser credit terms for its customers and prospect base. The company has since tightened its credit guidelines and implemented a number of financial controls.
