James M Zimmerman, Federated’s
chairman and chief executive officer, said the company is taking steps
to address Fingerhut’s credit delinquency situation, but anticipates that
it will take time to rectify the problem.
In the interim, increased reserves for bad debt will be required and, combined
with anticipated lower catalog sales due to a tightening of credit, there is
a potential for lowering EBIT in the direct-to-customer segment by an additional
$200-250 million in the Fall season, Zimmerman said. He added that 2001 is expected
to show significant improvement.
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