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Federated Cutting Jobs at Fingerhut Unit

October 14, 2000|Associated Press

After months of trying to cut losses at its Fingerhut subsidiary, Federated Department Stores Inc. said it will cut 550 jobs at the electronic retailing unit, or about 25% of the division's work force, to save $40 million annually. Federated, operator of the Macy's and Bloomingdale's stores, bought Fingerhut in March 1999 for $1.7 billion in hopes of jump-starting Federated's direct-to-customer sales business. But in July, Federated said bad-debt problems at Fingerhut would cost $150 million against second-quarter earnings. And in September, Federated said it was considering selling some or all Fingerhut operations. The restructuring will cost about $75 million to $100 million before taxes, which will be charged against earnings for the third and fourth quarters of its fiscal year that ends Feb. 3. Federated shares jumped $3.31, or 13%, to $29.25, on the NYSE.

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