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Duluth Fingerhut to close Feb. 2

The downtown Duluth Fingerhut catalog call center operation will close on Feb. 2, leaving 250 mostly part-time employees looking for work. The workers, who average between $7.25 and $8.25 an hour, will be paid through March 13.

The downtown Duluth Fingerhut catalog call center operation will close on Feb. 2, leaving 250 mostly part-time employees looking for work. The workers, who average between $7.25 and $8.25 an hour, will be paid through March 13.
The closing, prompted by some financial problems and a new business plan by Fingerhut Companies Inc., could mean additional jobs at the Eveleth facility, which currently employs about 300.
The Duluth facility opened in 1992; the Eveleth operation in 1988. Both are primarily outbound centers, where workers call existing Fingerhut customers to make other merchandise offers.
"It's been a roller-coaster year. Basically because of some serious credit delinquency problems and e-commerce falling far short of expectations, we needed a new business plan,'' said company spokesman Ben Saukko in a telephone interview from Fingerhut's Minnetonka headquarters.
The closing of the Duluth facility, which was announced to workers Thursday, fit into that new business plan in part because the company's lease was up on the building.
"This doesn't reflect in any way the work done in Duluth. The lease came up, and it happened to come up when we were looking at making reductions,'' Saukko said.
The company did look into other options, including selling the Duluth facility to an interested party, but the negotiations broke down, Saukko said.
The Eveleth operation, which currently employs about 300 mostly part-time workers, could pick up some of the business of the Duluth call center.
"We could be adding some seats in Eveleth. We expect the Eveleth and Brooklyn Center operations to absorb the Duluth work,'' Saukko said.
The company's financial problems developed in great part last "June or July'' following the company's switch from an old payment book system to a new revolving credit card process. "Part of it was the credit card didn't have the Fingerhut name on it, and some customers didn't understand,'' Saukko said.
Credit delinquency resulted.
The new business plan includes cutting back on mailings and product line and tightening credit. The company will return to an employment level of 1998.
"The plan is to make the company smaller but more profitable,'' Saukko said.
The company had a workforce of about 12,500, prior to cutbacks at facilities in Minnesota, Utah, Tennessee and Florida. It also owns Arizona Mail Order, which is a subsidiary mail catalog company. Its parent company, Federated Department Stories, is located in Cincinnati, Ohio.
The company was started in 1948 by Manny Fingerhut, who, along with his brother, sold seat covers out of his garage on Lake Street in Minneapolis. They would get lists of people who bought new cars and then contact them to sell the seat covers.
Bill Hanna is executive editor of the Mesabi Daily News of Virginia, a Murphy McGinnis Newspaper.

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