Fingerhut Parent Bluestem Files to Go Public

The Eden Prairie-based multi-channel retailer would rank among the 50-largest public companies in Minnesota based on its net sales for the fiscal year that ended in January, which totaled $521.3 million.

Catalog and online retailer Bluestem Brands, Inc., has filed an initial registration statement for an initial public offering (IPO) that could raise up to $150 million.

The Eden Prairie-based company-which changed its name from Fingerhut Direct Marketing, Inc., in February 2010-on Thursday filed the statement with the U.S. Securities and Exchange Commission (SEC).

The number of shares to be offered and the offering price have not yet been determined, but Bluestem said that it intends to use the proceeds of its IPO to pay down debt.

Bluestem was formed in 2002 after acquiring the assets of Fingerhut Companies, Inc., which dates back to 1948. Bluestem began as a company that sold products across the country exclusively through Fingerhut catalogs. But in September 2009, it also launched an e-commerce business, Gettington.com, which offers more than 20,000 products online. Goods sold range from apparel and jewelry to electronics, tools, and toys.

In the fiscal year that ended in January, Bluestem's net sales totaled $521.3 million, up 19 percent from the previous year. Meanwhile, it reported a net income loss of $11.5 million as compared to a $9.2 million profit the prior year.

Bluestem's revenue would rank it among the 50-largest public companies in Minnesota.

The company targets the low- to middle-income “credit-constrained consumer”-a group that's estimated to include about 100 million consumers, or about one-third of the U.S. population, according to its Thursday SEC filing. Bluestem offers a variety of credit options to its customers, allowing them to pay for their purchases over time.

In its SEC filing, Bluestem said that it plans to list its shares of stock on Nasdaq under the symbol “BSTM.” Underwriters of the IPO include Deutsche Bank Securities and Piper Jaffray.

Tom Petters, who is currently serving a 50-year prison sentence in Leavenworth, Kansas for running a Ponzi scheme that defrauded investors of an estimated $3.65 billion, was a Bluestem director and provided debt financing for the company in its early years. But Bluestem said in its filing that “none of the fraudulent activity of which Mr. Petters was convicted was at any time alleged directly to involve our company, nor has our company been the subject of or participated in any civil or criminal proceeding arising out his fraudulent activity.”

Minnesota's IPO activity has been slow during recent years. Only two local companies went public in 2010-New Prague-based Electromed, Inc., and Minneapolis-based SPS Commerce-up from one in 2009 and none in 2008.

Plymouth-based Kips Bay Medical, Inc., completed an IPO in February of this year, netting $16.5 million, and Edina-based OnPoint Medical Diagnostics, Inc., recently completed a reverse merger through which it will soon become public.

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