Peter Lytle plans to hold onto all of the assets of Fingerhut Cos. Inc. and to keep existing senior staffers if his bid to purchase the company is successful, said Marshall Masko, Lytle’s partner in the Business Development Group, and a former direct marketer.
Lytle and Masko plan to make a decision in early March about the purchase.
“The letter of intent we signed with [Fingerhut owner] Federated Department Stores Inc. essentially says that we are prepared to buy all of the substantial assets of Fingerhut and run it as an entity, and that includes Figi’s and Arizona Mail Order,” Masko said.
He added, “We would work with existing staff and work on stabilizing and rebuilding the company by focusing on its core competencies: direct marketing and catalogs.”
Cincinnati-based Federated said Feb. 16 that it would shut down the Minnetonka-based catalog if it couldn’t find a buyer.
Masko, who has worked for years with business turnaround specialist Lytle, has a background in direct marketing. From 1990 to 1994, he was senior vice president of marketing at Nordic Track. He returned to the company in 1996 with 1998 when he joined Business Development Group.
“I understand what it takes to run a catalog business,” he said.
Masko continued that “building off existing staff” made sense to him.
“There’s a very talented group of people at Fingerhut, starting with Steve Lightman, [executive vice president of catalog operations], who is a very capable man,” he said.
Keeping employees in place throughout the company is also a goal.
“It would be our objective to keep as many jobs as we can,” Masko said.
Fingerhut Cos. employs about 4,700 people in Minnesota; 3,000 at Figi’s in Wisconsin; 1,200 in Tuscon, AZ, at Arizona Mail Order; and 1,200 in Tennessee.
Business Development Group will perform due diligence over the next two weeks on Fingerhut’s financial viability. Areas to be looked at include long-term business and catalog performance, inventory, legal transactions and the firm’s cash position.
Masko added that Federated has been “very cooperative with us. They have opened our books to us and made their people available.”
“We believe it is viable and worth financing from what we’ve seen, but we have other things to look at,” Masko said.
The firm’s location is also an attraction.
“I have hired many people from Fingerhut at Nordic Track,” Masko said. “We live right here in Minnesota. We feel we have a personal stake in Fingerhut and we want the company to remain viable and grow.”
Business Development Group, a Wayzata, MN-based investment company, signed a non-binding letter of intent on Thursday to acquire Fingerhut from Federated. Masko wouldn’t discuss the amount of the bid.
Published reports said former Fingherhut CEO Ted Deikel and Tom Petters, who work together in Internet businesses in Eden Prairie, MN, made another bid for the company on Thursday. But Federated denied it.
“There is no other offer for Fingerhut as a full entity,” said Federated spokesperson Carol Sanger, “We have several other offers for bits and pieces.”
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