FINGERHUT GETS A GRIP ON THE NET
Business Week - Inside Wall Street
Fingerhut (FHT) is getting fresh attention from investors: Some pros see the stock as an important and undervalued Internet play. On Nov. 30, the stock shot from 9 to 11 after the company, a direct-mail marketer of housewares, home electronics, and a wide range of other products and services, reported unusually strong sales over Thanksgiving--helped by Internet shoppers. Fingerhut stock is up 50% so far this year. One New York money manager says it ''is an easy double in the next 6 to 12 months.''
More and more people see Fingerhut ''as well positioned to become a major electronic-commerce player,'' says analyst Michael Millman of Salomon Smith Barney. The catalog merchandiser's ''Internet sizzle,'' he notes, stems from its special capabilities--from Web-site development to collections and back-office functions.
Millman says that Fingerhut, which brought in William Lansing as president last May, plans to increase its stake in more Web sites. Currently, Fingerhut has five sites and a 20% stake in PC Flowers & Gifts, an Internet retailer. Lansing, a former General Electric vice-president for business development, notes that Fingerhut's Internet sales are 2% of the total, or more than $30 million. The Internet is ''pretty much our growth focus,'' adds Lansing, who was chief operating officer at Prodigy, an online joint venture of IBM and Sears Roebuck, before he went to GE.
To expand Fingerhut's E-commerce, the company is working on forming strategic partnerships with several major Internet players. Lansing expects Internet sales to more than triple, to $100 million, in 1999.
Fingerhut's proprietary database, analysts note, equips it to supply clients with credit information. On the Internet, Fingerhut has the advantage of providing revolving credit: Customers wary of sending their credit-card information across the Web, for example, could put their tab on a Fingerhut revolving charge account. Millman expects Fingerhut to earn 90 cents a share in 1998 and $1.05 next year.
BY GENE G. MARCIAL |
