Federated, a sort of holding company for a group of retail store chains, bought the venerable catalog three years ago and didn’t know what to do with it.

Fingerhut may have been hurt by the economy and its own mistakes.
But it was really a victim of merger mania.

Federated, a sort of holding company for a group of retail store chains, bought the venerable catalog three years ago and didn’t know what to do with it.

For starters, there was a class difference. Most Federated businesses catered to an upscale clientele, whereas Fingerhut sold to people known in the trade as "sub-prime."

Efforts by Fingerhut to upgrade itself were reminiscent of the Marx Brothers trying to break into high society.

First, there was the redesign. It turned the catalog from a classic mail order vehicle, crammed with products and promotions, into a tepid copy of Architectural Digest.

Then there was the credit fiasco. Fingerhut had a long history of providing installment credit and making money at it. But that was no longer good enough.

No, credit cards had to be hurled at millions of people who didn’t know what to do with them. And many did what any good scoring model would have predicted: They defaulted.

And then there was the dot-com delusion, the whole reason for the purchase in the first place.

It was obvious by summer 2000 that the whole thing had been a mistake.

Most pundits agreed that Michael Sherman, who was given the job of fixing it, was on the right track with his expense cuts. But then the economy tanked, and Michael ran out of time.

Now Federated has made an even bigger mistake. It owed it to Fingerhut, and to its employees, to tough it out.

Even with the downturn, Fingerhut sold many millions of dollars worth of merchandise in December. There was a business there, and a committed parent could have turned it around.

Failing that, Federated should have hung in there longer to find a buyer for the core property. Instead, it has opted to dump Fingerhut, and for whatever pennies it can pick up from selling the database.

This is just the sort of decision one expects from corporate boardrooms these days.

Meanwhile, we’re thinking of the many great people we know who have worked there, like Steve Leighton. And those of us who are foolish enough to care about such things can revel in the history of a great mail order firm. It was started in 1948 by Manny Fingerhut, rode the post-war wave of success, and made it into the 21st century.

But not far enough.

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