Federated Department Stores Inc., Cincinnati, is reportedly considering selling or scaling back operations at its Fingerhut direct marketing subsidiary. The Cincinnati-based retailer is weighing those options among others, according to news reports.
Executives at Fingerhut could not be reached by press time.
In July, Federated said that it would take a charge of between $150 million and $250 million against its future earnings to combat a growing bad-debt problem within the Fingerhut subsidiary. Looser credit restrictions, combined with aggressive solicitation of new customers, resulted in a larger-than-expected debt load.
The company has since increased its collections activities, tightened its credit guidelines and implemented minimum purchase requirements on its deferred-credit offerings.
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