FATEFUL FINGERHUT: Unable to consummate a deal to sell its Fingerhut unit as a whole, Federated Department Stores Thursday opened the door to third parties interested in individual parts of the business and said it would lay off about 3,300 employees by April 5. In February, Business Development Group Acquisitions Inc. signed a nonbinding letter of intent to acquire the business, but has yet to secure committed financing and close the deal, though negotiations continue. If a sale is not completed, the remaining 400 Fingerhut employees would be retained during a winding down of operations.

KELLWOOD’S DEBT DIP: Moody’s Investors Service cut Kellwood Co.’s senior implied debt rating to Ba1 — the highest level of sub-prime or junk — but saw enough security to assign the firm’s bonds a stable outlook. The action reflects Kellwood’s declining sales and earnings in “a difficult operating environment, as well as changes in the market position and strategy of the company’s customers,” said Moody’s analyst Philip Emma, in a statement.

LIBERTY ON THE BLOCK: Marylebone Warwick Balfour, the group that owns Liberty, the London specialty store that has just undergone a $15 million facelift, plans to sell all its assets over the next four years. MWB will sell assets including Liberty and its Malmaison hotel business in a bid to pay off debts incurred from acquisitions over the past five years and to return at least $3 per share to investors. Sources said Liberty could be sold for up to $115 million.

BLUEFLY FUNDING: Internet off-pricer Bluefly Inc. secured $4 million in standby financing from Soros Private Equity Partners on Wednesday, according to filings with the Securities and Exchange Commission. Before the latest round, Soros pumped about $40 million into the firm, acquiring a 78 percent stake. Chief executive Ken Seiff told WWD that, while the firm was still trying to raise outside capital, the latest infusion “will certainly get us at least through the end of the year.” Some of the additional funding will be used to develop the next generation of the firm’s Web site with the help of Blue Martini Software, with which it entered into a software license and service agreement earlier this month, according to the filing. Bluefly also extended its factoring agreement with Rosenthal & Rosenthal to March 2003.

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