Federated Reportedly Mulling Sale of Fingerhut Unit

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.