Report: Bluestem Brands For Sale, Could Fetch $1B

According to multiple news reports, the owners of Bluestem Brands have hired banks to seek buyers for the company, which generated more than $830 million in revenue last year.

Bluestem Brands, Inc., an Eden Prairie-based home goods retailer that sells products online and through catalogs, is reportedly up for sale—and it could be valued at as much as $1 billion.

The Wall Street Journal broke the news Wednesday afternoon, citing “people familiar with the matter.” Bluestem did not immediately respond to Thursday afternoon calls and emails from Twin Cities Business seeking confirmation about the plans.

Bain Capital Ventures and Battery Ventures, which own Bluestem, have reportedly hired bankers at financial advisory and asset management firm Lazard, Ltd., to help it identify potential suitors.

Bluestem sells a variety of products—everything from shoes to car seat covers—to low- and medium-income customers through its Fingerhut and brands. Its PayCheck Direct brand also works with medium to large employers, government agencies, and other organizations to sell large-ticket merchandise through a payroll deduction system.

Fingerhut was purchased by Federated Department Stores Inc. for $1.7 billion in 1999 but after losing money, Federated decided to shut it down. In 2002, Tom Petters, who is now serving a prison sentence for orchestrating a Ponzi scheme, pulled together financing and joined forces with former owner Ted Deikel to acquire Fingerhut's assets. In 2013, Petters’ bankruptcy estate collected $85 million in deferred dividend money from Bluestem.

In 2011, Bluestem filed to go public and was valued at around $500 million, but it postponed the public offering, citing market conditions.

Unnamed sources told Bloomberg that a sale of Bluestem could fetch as much as $1 billion. While details of who might buy the company and what price is being asked have not been reported, Bluestem’s website states that the company is heading toward $1 billion in annual sales.

The company recently reported 2013 sales of $839 million, up 20 percent from the year before. Bluestem said it was its fourth consecutive year of double-digit revenue growth, and that revenue has grown an average of 18 percent for each of the four years.

“Our strong sales growth confirms that we continue to meet an important need for our customers,” Bluestem CEO Steve Nave said in a statement distributed last week. “Our newer brands like PayCheck Direct and, combined with new credit products such as Fingerhut FreshStart provide the opportunities for low and middle income Americans to purchase the items they need with the flexibility of paying over time.”

A recent Star Tribune report indicates that Bluestem has more than 1,000 employees in Minnesota—working at its headquarters in Eden Prairie and its distribution facility in St. Cloud.