Fingerhut makes case as Internet play
December 7, 1998 05:22 PM
By Gregory Crawford
CHICAGO, Dec 7 (Reuters) - Direct marketer Fingerhut Cos. Inc. FHT built its reputation as a catalog retailer, but after a year of snapping up pieces of various online merchants it hopes Wall Street recognizes it as an Internet play.
"I think that what's happening now is that the market is starting to recognize that this is truly an Internet company and certainly better positioned to be a big, big player on the Internet," Fingerhut President Will Lansing said.
But shares of the Minneapolis company have been left behind by the craze for anything Internet, particularly online retailers.
Monday afternoon, Fingerhut stock, traded on the New York Stock Exchange, was ahead 5/8 at 13-7/8, well off its year high of 38-9/16 reached in mid-July.
In the last couple of months, companies like Amazon.com Inc. AMZN , eBay Inc. EBAY , Yahoo Inc. YHOO and others with links to the Internet have seen their shares rocket amid expectations consumers will flock to cyberspace this holiday season.
"We're already a very big Internet retailer," Lansing said in a telephone interview after the company said it bought about a 20 percent stake in Zone Network, which runs two websites, www.MountainZone.com and www.skiresorts.com.
"We're about to become much bigger as we start to redirect some of our customer activity to the 'net," he said, adding that Fingerhut has a backbone to support its ecommerce sites that no other online retailer can match.
"We have a level of infrastructure and skills and database marketing capability that no one else has," he said.
He added that the company has a "full plate" of similar Internet-related acquisitions in the works and would also use its collection of 25 catalogs to direct people to its websites.
With the stake in Zone Network, Fingerhut plans to bring its merchandising skill and promotional expertise to a site that is strong on content, Lansing explained.
"We think we can beef up merchandising quite a bit on MountainZone," he said. "One of the plays is for us to push the ecommerce side, and they can push the editorial side."
He added that Zone Network will help Fingerhut develop additional websites for other merchandise categories.
Zone Network is not expected to have much impact on Fingerhut's bottom line until Fingerhut increases its stake, Lansing said.
"Basically the plan is to put a lot of merchandising and promotional clout in this, flip it into the black and increase the equity stake," he explained.
((Chicago equities news, 312 408 8787, chicago.equities.newsroom@reuters.com))
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