FEDERATED FINDS BUYERS FOR FINGERHUT ASSETS

Subsidiary's Former CEO Involved in Acquisition

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CHICAGO (AdAge.com) -- Federated Department Stores signed a non-binding letter of intent to sell assets of its beleaguered Fingerhut subsidiary to the unit's former CEO.

The deal with Theodore Deikel, the former CEO for the catalog and e-commerce unit, and Thomas Petters, a wholesaler, is pending negotiations of a definitive purchase agreement.

Assets to be sold include the subsidiary's distribution centers and other facilities in St. Cloud, Minn.; its corporate headquarters in Minnetonka, Minn.; a data center in Plymouth, Minn.; a distribution center in Piney Flats, Tenn., and the Fingerhut name, Web site and existing inventory.

If the sale goes through,

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the new owners hope to rehire some Fingerhut employees, according to a Federated statement.

Federated laid off 3,300 of Fingerhut's 6,000 employees in April after talks with a potential buyer, Business Development Group Acquisitions, fell through.

Cincinnati-based Federated, which operates 450 stores including Bloomingdales and Macy's, acquired Fingerhut for $1.7 billion in March 1999 in an effort to ramp up its e-commerce offerings, but the unit suffered losses in 2000 and 2001.

Federated announced in Januray that it would shut down the subsidiary, and at the time did not expect to find a buyer for the money-losing business.

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