SPANISH FORK — Fingerhut wants to sell its 1.4 million-square-foot distribution center.
Federated Department Stores Inc., Fingerhut's parent company, confirmed to the Deseret News that a Chicago real estate firm has been asked to search for a buyer and complete the sale, said Ben Saukko, a Fingerhut spokesman.
The price was not disclosed. The Fingerhut division announced in February it would close the Spanish Fork facility no later than February 2002. About 100 of its 250 employees lost jobs.
All of the workers are now gone, and some of the equipment has been taken down. Only Banta, which leased a small amount of space in the mammoth facility, remains.
Fingerhut continues to do "quite a bit" of business over the Internet, Saukko said.
Last week, Federated, which acquired Fingerhut in March 1999, announced earnings for the reminder of the year would be lower than expected because of the Sept. 11 terrorist attacks. Sales already had slowed before the attacks. In addition to Fingerhut, the company owns Bloomingdale's, Macy's, Burdine's, Goldsmith's, Lazarus and Rich's.
Built at the mouth of Spanish Fork Canyon, the $70 million facility was to become Fingerhut's Western hub, filling orders for electronics, housewares, furniture, clothing and jewelry for 16 states, including Alaska and Hawaii.
Fingerhut anticipated hiring more than 500 employees within its projected opening of July 1995.
An economic boom seemed imminent. Projections showed Western Distribution paying $5.1 million in property taxes within 12 years and generating $10.4 million in wages for local workers. Economists also estimated that the company would spend $163.7 million in Utah by 2004.
But the distribution center never fully opened, although it took on third-party fulfillment orders for a time and completed some of its own orders on a small scale, Saukko said.
The sheer size of the building — as large as 24 football fields — contributed to delays. Fourteen-foot snow drifts piled up on the roof and eventually collapsed it, causing $5 million in damage, including damaging sophisticated conveying equipment. The planned July 1996 opening stalled.
Fingerhut blamed the roof collapse for not opening rather than economic conditions.
When construction started in 1994, Fingerhut's future looked bright, as it basked in a 14 percent growth climate.
But higher costs of postage, paper and money in 1995 continued to knock the wind out of the company's business. By 1996 the market was turning. Net earnings fell that year to $40.2 million, down from the 1995 posted earnings of $50.8 million.
In 1997, Fingerhut restructured its corporate leadership. But fully opening the facility designed to fill 120,000 orders a day was never more remote. Instead, Western Distribution leased about 30,000 square feet to Banta Global Turnkey, a subsidiary of Banta Corp., a publicly traded printing company of computer manuals and books.
Banta brought in its own conveyor equipment and sat it up near Fingerhut's then-idle tilt tray sorting system imported from Denmark, considered the heart of Western Distribution's system. Later, Fingerhut fired up the million-dollar sorting system when it began fulfilling its own orders, but never on the scale that met its capacity.
A year ago Fingerhut announced it was downsizing and de-emphasizing its third-party fulfillment business, which then included Wal-Mart, Intuit, E-Toys and Wet Seal. Many of those orders were fulfilled in the Spanish Fork plant, Saukko said.
As contracts ended, they were not renewed.
Fingerhut also closed three other facilities in the last year, including a call and collection center in Tampa, Fla., and a printing facility in Minnesota. Those closings cut 1,150 employees.
The huge structure is in an economic development area. The city spent $220,000 straightening Powerhouse Road for the 60 trucks anticipated to travel in and out of the site daily. Now officials are rewriting the contract with Fingerhut to make sure the city is protected when a new owner takes over.
E-mail: rodger@desnews.com