FEDERATED LAYS OFF 3,300 FROM FINGERHUT

Talks With Buyer for Catalog Division Stall

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CHICAGO (AdAge.com) -- Federated Department Stores will lay off 3,300 employees from its Fingerhut subsidiary as talks with a buyer for the catalog group have stalled.

The layoffs will take place April 5, the company said late Thursday.

Federated signed a non-binding letter of intent last month with Business Development Group Acquisitions for the sale of the catalog and e-commerce group, but the deal has not gone any further.

The employees to be

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cut were part of a group of 3,700 Fingerhut staffers who were notified in early March that they could lose their jobs within 60 days, said a Federated spokeswoman.

Cincinnati-based Federated, which operates 450 stores including Bloomingdale's and Macy's, closed the unprofitable Fingerhut unit in January following losses in 2000 and 2001.

Although Federated and Business Development Group are continuing discussions, Federated will explore the sale of individual Fingherhut components including plants, distribution centers, call centers, mailing lists and inventory.

Federated, which maintained earlier expectations that the sale of Fingerhut's assets will generate more than $1 billion over the next four years, acquired the unit for $1.7 billion in March 1999 in an effort to ramp up its e-commerce offerings.

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