Fingerhut layoffs postponed for review
By Rachel Katz
Bloomberg News
CINCINNATI — Federated Department Stores Inc., the owner of the Macy's and Rich's chains, agreed to delay firing more workers at its Fingerhut catalog and Internet unit for three weeks, a lawyer for company shareholders said.
Associated Press
The company also agreed during that time not to sell any parts of the unit so attorneys can review documents and depose officials about Federated's investment in Fingerhut, said Patrick Daniels, an attorney with Milberg Weiss Bershad Hynes & Lerach, which represents shareholders suing Federated and Fingerhut officials.
Protesters marched yesterday outside the Cincinnati offices of Federated Department Stores, which is trying to get rid of its Fingerhut division.
Federated stopped mailing Fingerhut catalogs and fired about 3,300 of the unit's 6,000 employees this week as part of its plan to sell or close the division. Selling off pieces could make it easier for management to hide the extent of Fingerhut's losses and may make it less attractive to a single buyer, Daniels said.
Federated made the agreement during talks with U.S. District Judge John Tunheim, who issued no formal ruling, Daniels said. The judge is expected to set a hearing on the shareholders' request for an injunction on further sales or firings, he said.
The owner of the Bloomingdale's and Lazarus chain purchased Fingerhut for $1.7 billion in 1999.
Federated spent more than $720 million to return Fingerhut to profitability last year as the unit's sales declined and credit-card delinquencies rose.
Federated needs to get rid of Fingerhut, which sells discount products mostly to low- and middle-income customers, to focus on its department stores, investors and analysts have said.
