Last Thursday Family Christian Stores (FCS) announced they will be closing all 240 locations in 36 states, liquidating their inventory, and laying off over 3,000 employees.
It is a sad day for Christian retail. In this case, the only surprise is that it came so soon after their previous bankruptcy reorganization.
In February 2015 FCS suddenly declared bankruptcy and it was not until June of that year that the terms of their reorganization were finalized. I wrote about this frequently here, here, and here. The bottom line is that, in the end, FCS was able to wipe away over $120 million in debt and was able to buy $20 million in consignment inventory at 70%-90% off the wholesale costs.
In other words, their reorganization allowed them to start over with “free” inventory in their stores and without debt.
In the last 18 months, since the court approved reorganization, they had two Christmas seasons to replenish their coffers, so to speak. FCS had projected sales of $216 million for fiscal 2015. Until more is revealed I cannot speculate what their sales have been in the last 18 months…other than to state the obvious…it wasn’t enough.
What Happened?
There is a crucial question of whether the business model of the retail Christian store is structurally broken, or whether it was just FCS’s model.
Did the management of post-bankruptcy FCS do the things necessary to try to stay in business that you see from other retailers—closing unprofitable stores, focusing on more profitable merchandise, etc.? In June ’15 they had 266 stores. Now they have 240, according to the press release. Apparently they did close a small number of locations and moved some others. But what about all the other aspects of retail? A proper product mix to meet the needs of their customers? Top level staff training in stores? Reduced overhead at the top levels of corporate management?
FCS was given a great opportunity for a reboot with their bankruptcy. They no longer had any debt. They had a large cash infusion from their suppliers who provided inventory which they never had to pay for.
And yet I quote from excerpts found in the FCS letter to vendors, “Despite improvements in product assortment and the store experience, sales continued to decline. In addition, we were not able to get the pricing and terms we needed from our vendors to successfully compete in the market.” This is, in part, laying the blame on the publishers and vendors for the decision to close. There wasn’t much the suppliers could or were willing to do to further support FCS. The publishers, vendors, and banks walked away from over $120 million during the bankruptcy. They had already “contributed” significantly and gave FCS the opportunity to continue to be an important factor in the Christian community.
Before anyone declares Christian retail is “dead” we must first answer the above “what happened?” question. I know of many Christian retail bookstore operations that are healthy and strong so be careful of blanket claims of Armageddon.
However, as I’ve said elsewhere, there is no question that Family Christian’s closing will have a “deleterious effect on many communities which have relied on their local store for their Christian products, whether it be a greeting card, book, or Bible.” There may be a number of cities where the business will simply go to another Christian store. Unfortunately, in places where they were the sole outlet the impact will be felt.
If there is a permanent structural problem in the Christian retail store model, it is a shame. This has been a long-standing industry serving the Christian market very well. For example, people making a lifetime purchase of an expensive Bible, want to see and feel it before buying one. This can’t be done online. The gift section carries products that are not found in other retail stores. The greeting card line is not replicated on Hallmark or American Greetings racks. But books and music are easily found online or in a church’s bookstore at significant discounts.
Since I began my career in Christian retail I truly believe that the local store can be “the supply sergeant in the Lord’s Army.” It is the place where a bible study leader can compare multiple studies to find the right one for their group. It is a place where a church can get the supplies they need for Sunday’s service and weekday ministries. A place where a pastor or a seeker can review hundreds of books on various topics. I have also said it is a place where there is an ecumenical meeting every day, but no one realizes it. Every flavor of the Christian church passes through the doors of a Christian bookstore – all shopping the same aisles.
Retail is Always in Flux
There is no question that brick and mortar stores are in the midst of disruption. Some would call this disruption “The Amazon Effect.” On Friday J.C. Penney announced the closing of two distribution centers and 140 store locations (approximately 15% of the chain) while also offering early retirement packages to 6,000 employees. They are not alone. The Limited closed all 250 locations in January. Wet Seal announced the closure of all 171 locations. American Apparel all 110 locations. Last year Macy’s announced the closure of 100 underperforming stores. Kmart will be closing 108 locations and Sears 42 locations (and sold their Craftsman brand to Black & Decker).
Retail business is often a fragile venture. Physical stores are not the only ones subject to disruption. Online operations are also at risk. For example, NastyGirl.com, an online apparel company, grew from a home-based eBay business in 2010 to nearly $100 million in sales in six years. And yet in November of last year they declared bankruptcy and the brand was sold for $20 million.
Remember, however, that store closures make the headlines, not store openings. For example, Walmart will open, relocate or expand 59 Walmart and Sam’s Club locations in 2017. These openings will employ about 10,000 people. Nor did I read much about the successful years of T.J. Maxx and Marshalls which have plans to add 1,300 stores in the U.S. and Canada.
An hour before this FCS news broke, I was talking to a friend about the difference in leadership by those who are entrepreneurs and innovators and those who are more “standard” business managers. Sometimes entrepreneurs and innovators are not good managers and good managers are not always innovators. But those who are able to lead and nurture a culture of innovation are the ones we read and write about. In retail, it can no longer be “business as usual” or the consumer will go elsewhere.
What Now?
Every author is asking “how does this affect me?” Answer? For the majority of authors, probably not much.
Top level, bestselling authors, were in the stores, but the inventory selection did not run deep. FCS also carried a limited fiction section, bestsellers mostly.
In its heyday Family Christian was as much as 10% of a Christian publisher’s business. Now it is a small fraction of that.
Those who publish Bibles (HarperChristian, Tyndale, B&H, Crossway, etc.) will lose a major sales outlet. An irreplaceable one. But that doesn’t really impact authors either. But it does hurt our publishing partners. While hard news for the publishing industry to absorb, I suspect most companies had limited their financial exposure to FCS. Yet, any loss is regrettable.
I hope that there won’t be a chain reaction of subsequent bankruptcies or undue financial stress on publishers or gift suppliers. For example, due to the 2015 bankruptcy of FCS, Gospel Light Publishing lost $143,000 and had to declare their own Chapter 11. They later sold their curriculum assets to David C. Cook Publishing.
It is also a sad day for 3,000 Family Christian employees and their families. Pray for them too.
I am sad to hear that they will all be closing, they will be greatly missed in my area. I wonder if maybe Hobby Lobby will be picking up some of that and increasing their book department. They have a bit there now, bibles, cards and such…but with FCS gone, maybe they will be the new source?
Hobby Lobby also owns the Mardel chain. Mardel is regional in its reach. 35 stores in 7 states: http://www.mardel.com/store-finder
I had a thought similar to Lisa’s. Perhaps the brand could be resurrected as “Family Christian Express”, a smaller version within existing Hobby Lobby stores. They could test it in states where Mardel doesn’t already have a presence.
An interesting idea, but I, for one, would not want to buy a brand that has failed twice in two years. 🙂
Whoa. All I can think is, mine is no challenge at all. I’ve got so many questions but I’d throw this out: Was there any way this could have been prevented? Any? Any at all?
Probably not given their particular situation.
One can only guess, but I wonder if they lost a lot momentum and customers during the bankruptcy reorganization in 2015. It is hard to regain the trust of a consumer if you go to a store and not find what you were looking for.
As I mentioned in my post, retail is a fragile business. The margins are thin in the best of times.
Steve, it’s sad indeed, especially re: the Bible sampling issue, as you mentioned. I wonder if this presents an opportunity for the original Christian bookstore model — the mom-and-pop, ministry-minded-not-massive-profit idea. Before Christian chains, these were the places people in the community could go to look at Bibles, etc.
On the secular side, with the Border’s bankruptcy and the closing of so many B&Ns, there’s been a rebirth of the independent bookstore.
Do you think that could happen here? Or are there certain inherent challenges in Christian retail that militate against it?
Jim,
You make a good observation. Yes, the small store has the opportunity to serve the community. There are a lot of these stores already.
Unfortunately back in the 90s, at their height, Family Christian moved into a number of cities to compete with the Indie stores. Sometimes through acquisition but also simply by opening up a few miles away. This caused a number of stores, which may not have had significant capitalization, to go away.
Of course this is nothing new. Walmart’s expansion had the same effect to small-town retail across the country.
The Munce Group is a collection of Christian retail stores that band together for marketing and selected buying power. They have a number of stores in hundreds of communities doing just what you’ve described. http://www.munce.com/
I do not think there are “inherent challenges” unique to Christian retail. If that were so, then Lifeway and Mardel would be in trouble, and they are not.
For example, in 2013 Lifeway bought the Berean Christian Store chain which had 17 stores in 7 states. (I worked for Berean for 11 years in the 80s and early 90s.)
Lifeway is now the larget Christian bookstore chain in the country in both number of stores and in sales volume. They have 170 locations in 29 states. Here is a list of their store locations: http://www.lifeway.com/StoreLocatorListView
It is very sad to lose them. We have a Family Christian store about a quarter mile from my house, next to the supermarket I frequent most. There is a Lifeway store 2 hours away, but it won’t take the place of being able to drop in down the street for just the right card or gift at a moment’s notice. (Any chance Lifeway is considering taking over some of the locations once FCS is gone?)
I agree about Bible shopping–looks like I have a few weeks to choose my son’s 8th grade ‘graduation’ Bible. I definitely don’t want to be limited to some shrink-wrapped Barnes and Noble edition.
Praying for everyone affected by the closing of Family Christian stores.
I was disappointed, but not entirely surprised to hear about FCS’s closing last week. I appreciate the big picture you portray here, Steve. It’s easy to focus on the doom and gloom aspect with so many stores closing down—”Oh no! Will all Christian bookstores/brick and mortar stores be closing?” But you convey a broader perspective with the reminder that some companies are doing well enough to continue opening stores.
Thank you for your balanced perspective, Steve.
What a sad thing, for everyone involved.
For what it’s worth, I think that maybe FCS failed to recognize the fact that their niche simply wasn’t deep enough, and that what they offered was duplicated in other venues, at least to enough depth that most consumers were satisfied.
The last time I went to Barnes and Noble their collections of Christian theology and Christian fiction were extensive enough to obviate the need to find a more specialized store, and my wife and I could find other things there as well, like my aviation magazines and her photography books. It became a one-stop trip versus two stops, and while we wanted to support FCS the time constraints often prevented that.
Another factor may be that Barnes and Noble and Borders changed the ‘bookstore experience’; bookstores used to be cramped dingy places with weird beatnik-and-hippie employees who could lay a hand on every item, and could find you absolutely anything you needed. They were Aladdin’s Caves of adventure and possibility.
The megastores stopped that cold, and retrained our consuming hearts to a blander paradigm. We could stroll wide aisles, sipping latte, and listen to piped-in Enya rather that a scratchy tape of Jefferson Airplane.
Nothing wrong with the new model, except that it takes a lot of infrastructure – store footprint and location – to maintain, not to mention extensive inventory. And, personally, I don’t think FCS had the ‘weight’ to follow that model. Even Borders eventually fell off the financial highwire.
The fate of the Christian chain store may well be tied in with working partnerships with large churches; a Sunday audience that may potentially number in the thousands can translate into a weekday clientele that will support the enterprise.
Andrew,
I would not have classified FCS as having mega-stores. Their footprint was usually modest (in the 5,000 square foot range), with a number of exceptions, of course.
One of the Christian bookstores I managed in the distant past was 12,000 sq. feet for example.
At one point in their evolution FCS had a number of stores in malls. Those stores were even smaller.
You are correct that Barnes & Noble and Borders megastores changed the bookstore experience. That change had already begun over a decade earlier with the B. Dalton mall bookstore model, which was purchased by B&N in 1987….and the Walden bookstore model.
Trivia: Walden was bought by K-mart in 1984 who later also bought Borders (in ’92). The new Borders group then bought themselves away from K-mart in 1995. Sixteen years later the whole thing collapsed into bankruptcy for a number of reasons…Debt being one of them.
I’m a bookseller at Barnes&Noble and I’d echo Andrew’s comment, but I think there is something else to consider here, and it’s the calling out God may be doing with Christians in America in a lot of areas of our culture.
Consider your statement, Steve:
“I truly believe that the local store can be ‘the supply sergeant in the Lord’s Army.’ It is the place where a bible study leader can compare multiple studies to find the right one for their group. It is a place where a church can get the supplies they need for Sunday’s service and weekday ministries. A place where a pastor or a seeker can review hundreds of books on various topics. I have also said it is a place where there is an ecumenical meeting every day, but no one realizes it. Every flavor of the Christian church passes through the doors of a Christian bookstore – all shopping the same aisles.”
All of the above can also be had in the Religion section at B&N, except you’ll also have the opportunity to have discussions and maybe even develop relationships with people seeking knowledge and answers in the Islam aisle, the crystals aisle, the paranormal aisle… You know, the people Jesus call us to love, but who we rarely have such a good opportunity to connect with. Local B&N stores and public libraries are becoming the community centers of our century — book lovers can connect over their love of books, and it can lead to other connections, great discussions and new relationships, no matter their backgrounds.
Lisa,
You make a good point about the potential for ministry to happen in a Barnes & Noble. But a B&N and a Christian bookstore have vastly different mission statements, stock selection, an other intangibles.
For example a B&N doesn’t really have a “bible study” section where dozens of different small group studies are shelved together. There might be one or two. (and by “bible study” I mean small group designed studies, not trade books.)
I would suggest reading this fascinating post by a bookseller in Canada who describes in much better detail than I, the unique place that a Christian bookstore can be:
https://bookshoptalk.wordpress.com/2017/02/27/industry-needs-improvement-but-fcs-haters-words-not-helpful/
Meanwhile, may God grant you wisdom and discernment as you minister to those who shop in your store.
Thanks for the link, Steve, and thank you, truly, for the prayers. Warms my heart.
I didn’t really see where the essay you referenced talked about the unique mission of Christian retailing, but I think many of the “real reasons FCS closed” that the author lists are spot on, with one exception. It’s not realistic to expect book sellers to “nurture authors over time” when neither publishers nor most agents appear to be willing to do that in the current industry.
Certainly, there are things in that list that B&N has addressed and overcome, which is why they’re still here; and challenges B&N has yet to prove they can overcome, which is why my work can sometimes feel like hanging out during the last days of the Library at Alexandria.
Make no mistake, I’m not against specifically “Christian” things—I worked in admissions and development for over a decade for private Christian schools in the 80s and 90s, and I homeschooled my sons. I do understand the unique mission and purpose that Christian alternatives to secular organizations have in our culture.
But I would refer again to Andrew’s comments, and since then, others about the changing nature of what people today desire in a bookstore There are two phrases that I hear variations on multiple times a day.
1) “I know I could buy this cheaper online or for my e-reader, but there’s just something about being able to hold the actual book.”
2) “You guys are great, I’m so glad you’re still here. I don’t know where me and my [friends, book club, writer’s critique group, kids when they have the day off of school] would go if you weren’t here.”
For increasing numbers of customers, price isn’t really an issue. If they’re looking for the lowest price, chances are, customers look online. The average person who walks into a bookstore today desires two things: the ability to hold a book in their hands before they buy it and/or the opportunity to meet up in a welcoming and cheerful environment with other book lovers.
Even if B&N doesn’t currently have the small group studies in the volume that an FCS would have, they’re very responsive to customer needs and desires and their employees’ input. For example, when my manager heard I have a book out, she immediately ordered a batch into the store, and my fellow booksellers have been great about recommending it and helping me sell it. So much so, they just ordered another batch. It’s probably the most support I’ve had for what I’m trying to do from anyone in the industry since I started writing fiction ten years ago. If, in the wake of FCS closing, Christians are interested in B&N expanding its Bible Study section, and they can show there’s even an adequate market, I have no doubt they’d make that happen.
While I appreciate and applaud Jaylen’s efforts and success in reaching Christian millennials with more appealing and relevant merchandise than the Evangelical equivalent of Elvis on velvet, I’m not sure about the idea that this generation isn’t interested in buying books. In fact, recent surveys show that millennials prefer to read physical books over e-books more than any other generation. I help millennials (and younger) walk out of B&N with armfuls of books everyday… again, price doesn’t appear to be an issue.
The fact that the Christian publishing industry and Christian authors don’t appear to know how to market or write fiction or nonfiction for millennials IS a very real and pressing issue—it may be THE most important challenge that Christian publishing needs to address currently, and the fact that marketing to this generation seems so mysterious may be an indicator that the establishment needs to get out a little more… and I’ve come full circle.
I haven’t actually prayed in the aisle with a customer (yet), but I would feel completely comfortable doing so. I certainly have let customers know I’m praying for them. We don’t need to be in a Christian retail environment to make that happen.
My opinion of FCS’ demise is when they stopped honoring the Sabbath and was open on Sundays. That’s the big one. The other is that they began promoting on-line sales. Why go to a store when on-line is more convenient.
FCS will be missed in our area of San Diego, the only store of its kind, but as your article pointed out the fiction areas had been dwindling for years and the kids’ area repetitive rather than inviting. Having worked in other areas of retail (jewelry), adaptability and having a unique marketing edge are very important. Sorry to see it go but I do like the suggestion of more mom-and-pop or specialty stores. For instance, we have a sci-fi/fantasy bookstore that does very well with many author visits and has cultivated a real following that makes me drive 45 minutes to an event because of the high quality authors who are featured and very amazing staff there. Thank you for sharing your perspective and insights here.
In early 2015, I had two book signings at two Northern Virginia area FCS for a nonfiction parenting book. Both were on a Saturday afternoon with decent weather. Both stores had very limited foot traffic (one location had less than a dozen people come in the store in the two or so hours I was there). And yes, I asked to come at the best time the managers of those stores indicated. One store didn’t have any idea whether or not my book was on its shelves (it was–I had to find it).
I also did a book signing at a Maryland independent bookstore around the same time, on a Thursday evening (again, at the manager’s suggestion). Tons of people and knowledgeable sales staff.
The independent retailer had a vibrant community feel to the store, while FCS had a, er, deadness to it overall.
While I’m always sad to see a bookstore close, it seems like FCS stopped connecting with customers a long time ago.
My personal experiences with FCS gave me little reason to shop there. They had a limited selection of books for young children, they lacked pricing on numerous products, had no store assistance except at the register and minimal after season sales.
In this age, I think it’s imperative to have an online presence, so I don’t understand the complaint on that point. For years, B&N has had an online store. I like to shop sales. Sometimes it is cheaper to buy online; other times the store prices are better.
I agree that they should have remained closed on Sunday.
I decided a couple of months ago that I would no longer shop at FC because its devotional inventory was so low. Sadly, it was the only Christian bookstore in our area. As for the gift inventory, our local Hallmark store has many of the same or similar items. But, books? No. And Bibles – no. I always bought my grandchildren special Bibles and had their names engraved on them, an inexpensive, but special, perk at FC. I also loved that the FC employees would pray with me, sometimes taking me between two aisles and holding me. That is one thing in which FC excelled – hiring faithful believers. Sad days.
Bonnie Engstrom
Beautiful people with a heart for Jesus can be found on staff at many of these stores.
Thank you for sharing your experience.
I’m definitely praying for the families affected by this closing. It’s never easy to lose your job.
We don’t have many book stores where I live. All the major retailers have pulled out of my area. I’m one of those people that likes to flip through a book before buying, so I will feel the loss.
For us writers, I’m not sure there will be much impact. A good number of people buy ebooks now or order their books online.
Sad. I am praying for all involved. Thank you for your insightful article.
The only Christian bookstore in our area is a FCS and I have always fantasized about taking it over. I would have managed it differently. The footprint was nice and spacious, but the actual number of titles was always modest, and the books began to retreat over time, giving way to gifts. It was sad to watch. I would shop in a brick and mortar if there was one with serious content–not just fiction and a few pop titles–but now I guess I’ll get my books online.
Lynne,
There are times when I dream about running a bookstore again. There is so much satisfaction in putting the right book in the hands of a person who has come into your store for help.
Then I pinch myself and rejoin reality. 🙂
The problem is capitalization. $500,000 would barely fill the shelves with a reasonable quantity and quality of inventory. And then you have to have money to market the operation and cash flow to pay rent, utilities, and staff. Oh, if you want to have anything to pay yourself, good luck.
In my days as a bookseller I served as a regional consultant for CBA (Christian Booksellers Association). Anyone in our region (multi-state) who was considering becoming a bookseller would be sent my way. I would try my best to present the realities of what sort of investment in time and money it would take to be a successful bookseller.
Steve,
Thank you for your excellent article. In response to your comment about capitalization, I believe a top quality store can be opened for much less. We have the data to help open with the right inventory and good used fixtures are cheap. The major unknown is the cost of tenant improvements which greatly varies by market and location.
As you mentioned earlier, there are a lot of markets that will be without a store – major markets like Chicago and San Diego, mid markets like Bozeman, Fargo, Stockton and so many more. I think this is a real opportunity for independents to serve the Kingdom again. In fact, I have a number of stores talking about expanding.
As you started in Berean, I started in Family 48 years ago. It’s sad to see them go, but not unexpected. Many independent Christian stores are healthy and like all retail, we need to be responsive to shifting consumer trends. There is a strong future for Christian retail if located properly and run well.
Thanks Steve. You are correct that my half million comment was hyperbolic. Of course the amount of inventory at cost will vary from location to location depending on size of store, inventory mix, etc.
Back in my “glory days” of retail we had a very large store with inventory worth over $600,000 at cost.
Since all my bookstore anecdotes are rather antiquated (I last worked in a store 25 years ago) I defer to a pro like Steve Potratz who is still in the retail business after all these years. A tribute to doing it right.
Readers? In case you don’t know, Steve Potratz is the founder of the Parable Group. He really knows his stuff.
Check out their web site: http://www.parablegroup.com/
“……………. In addition, we were not able to get the pricing and terms we needed from our vendors to successfully compete in the market.”
Really, are you kidding, FREE wasn’t a good enough deal. Place blame everywhere except where it belongs. In the state where I reside filing a bankruptcy action also further prevents any foreclosure or eviction action from moving forward until the bankruptcy is adjudicated. So, in addition to free goods throw in free rent. I would also wager that there are employees who are not fully paid, if so, add some free labor.
I have seen skillful law firms advise business on successfully navigating this course in more than one occasion in the past. At the end of the day the owners and lawyers bail out, laden with cash, while leaving a trail of burning wreckage in their path. Long ago, our company was burned ONCE as a cost to learn this lesson. We learned it well.
For the last several decades we have depended on the wise Chinese policy of “No tickee, no washee”. If you are not going to pay your bill we PREFER you “give the business” to our competitors.
Steve, I agree that this closing is a very sad day. What is also sad is that the Christian community did not support “their” bookstores so that the company could stay in business. It’s sad that the business itself had the chance to walk away debt-free (except in a moral sense) and still did not survive. I confess that I use Amazon simply because I do not have the time to drive 25 minutes to my nearest Christian book store that may or may not have what I want to buy. Thanks for sharing your thoughts.
Steve,
I’m saddened but not surprised by Family Christian’s closing.
Family Christian has a location about twelve miles from here. The company bought out an independent Christian bookstore, and the owner went to work in a management position for Family Christian.
I used to work at a discount store in the same plaza. Since I worked in the area and I loved to read, I would go to Family Christian. I bought a lot of books and CDs there. I tried to support it because it was a Christian store.
Even back then, I wondered about the longevity of the company because it was known in that area as being “high-priced”. Churches needing candles and other items for events came into our discount store because Family Christian’s prices were too high for their budgets. Once a store acquires the reputation of being high-priced, it can be difficult to shake.
When I first started going to the bookstore the atmosphere was calm and relaxing. Later, I saw signs of increased stress and pressure on management and employees. That observation was backed up from what a person who worked in the company told me. To me, that’s not a good sign for the company’s health. Eventually, increased stress (such as cutting payroll hours) affects employee morale and customer satisfaction. Customers coming into a store such as Family Christian may require help in finding what they need, especially for Bibles and Vacation Bible School curriculum. If the store’s payroll hours are so drastically cut that there’s not enough knowledgeable employees, the customers will go elsewhere if they can. That means reduced sales. In response, companies often reduce payroll hours further. The cycle continues, until the store finally closes.
I’m saddened not only for the store employees’ loss of jobs, but also because the company reacted to business pressures the same way as other companies would. For instance, it started opening on Sundays; it cut payroll hours, and in its treatment of employees. When a person in management offered suggestions, the person was laughed at–not even given respect for thinking about the problem–I’ve seen that disrespect in secular business, but didn’t think I’d hear of it in a Christian business.
The topper was when I read about FCS blaming vendors’ pricing policies in part for the liquidation. I thought, “Excuse me, but the vendors gave up a lot to keep Family Christian in business!” The attitude of blame doesn’t reflect well on the “Christian” part of the name.
Many of you have made great observations from your own recent experiences at FCS stores. It shows the importance of a personal touch by any retailer.
As mentioned, retail is a tough and fragile business. If sales are not growing a store has to cut expenses. There are two places where cuts happen first. One is Marketing, works for a month or so, but then fewer people come to the store and the cycle is repeated. The second place is staff…partly because they are “easy” to cut. You can’t turn off the lights or air-conditioning. (In 1990 the air condition bill in my store was nearly $2,000 a month during the summer.) You can’t renegotiate the lease. So you are left with staff.
Thus you found stores like FCS with nearly skeletal on-floor help.
Steve
Steve,
Thanks for your willingness to give perspective on this and other issues.
A sad day, indeed! I’ve often marveled at the diversity of people that frequent our local Christian bookstore and enjoyed short conversations there as well. I cannot imagine my community without this family business even though a Barnes and Noble and other retailers compete with them.
Praying for the 3,000 Family Christian employees and their families.
There was no mention of World Vision in the article and having been a former employee I know from experience that FCS is a large supporter and it was one of my personal passions while there. Is there any word or news from them as to how they are going about replacing the face time they got from them?
Melinda,
FCS did support World Vision sponsorships in the past. I do not know if that continued after the reorganization in 2015.
Back then I wrote about the Charitable Contributions claimed by FCS in the latter part of this blog post:
https://stevelaube.com/more-about-the-family-christian-stores-bankruptcy/
Thank you for the FCS insight. I have spent days attempting to find information that would explain on a deeper level as to why our stores are closing. What you shared makes sense. Please keep the faithful customers as well as the employees in your thoughts and prayers.
Steve, thanks so much for this article. I own a small Christian retail chain in Texas (3 locations) all of my stores are located in malls. (Major malls might I add with extremely high rents) yet we are doing really well. I started the store at 19 years old because I was frustrated that stores like FCS and lifeway did not appeal to millinenials. Christian Retail is a very good industry. Most stores just aren’t evolving from old ways. (Sadly like most churches aren’t evolving) people are tired of religion and want true genuine relationship with Jesus Christ. My generation in particular. (I’m 24) we love Jesus and we are bold about it but we don’t typically by books and cds. 85% of my sales come from Christian apparel, jewelry, and gifts. 15% from bibles. FCS definitely lacked on apparel and gifts and that’s what people are seeking. The days are over for corny Christian shirts. People want lifestyle apparel that they can wear everyday that expresses their faith.
Lastly the fact that FCS is owned by multi millionaires. They should have had integrity during their bankruptcy to take care of those vendors. It affected our industry as a whole really bad. I know of 10-15 vendors that were affected to the point of almost closing.
Jaylen,
Tell us more about your stores and their locations so we can let people in your area know about you.
At the point they reorganized they needed to have shed at least 40% of their non-performing stores. As an former operator of a small chain of bookstores, it is the non-performing stores that kill a chain. If the 80/20 rule applies to FCS, they should have about 50 cash cows in their portfolio and someone with cash, retail knowledge, and the ability to renegotiate rents could have a very strong thriving business.
Agreed. Although, in some cases it may have been too expensive to break the lease and close that operation. The real estate side of the equation is one that is often overlooked by those observing the success or failure of a retail store.
Once upon a time, there was a corporate retail chain that sought to renege on their commercial leases among other things. My experience is that a bankruptcy action would selectively permit them to break and abandon leases they didn’t want. They knew which stores performed and which stores didn’t before the initial bankruptcy filing. It should have been easy for their very astute law firm to shed specific (losing) leases through the bankruptcy.
Secondly, if a lease isn’t paid look what happens. They are EVENTUALLY evicted and OWE some money (back rent, legal fees, etc.) SO WHAT to an organization who isn’t going to pay the bill anyway (that debt can easily be discharged by the court). They even petitioned the court and obtained permission to keep CONSIGNMENT merchandise without paying for it that they clearly knew did not belong to them further breaking their word(remember back when this used to be called… stealing) so the breaking of leases shouldn’t have been a problem in this climate. So much for moral obligation.
Lastly, bankruptcy action stays (stops) foreclosure and collection actions. So, particularly if you are not planning for the long term, why not stay in all the stores, rent and hassle free, and collect as much CASH as you can while the bankruptcy proceedings slowly wend their way. Retail 101; sales without (or very minimal) cost of goods or overhead expense are MOSTLY profit. Eventually they closed all stores, went online with the free goods while wholesaling some bulk lots of merchandise, all at deep discounts. This further hurt the honest mom and pop retailers, causing even some more of them to suffer or lose their family business. This looks like a main culmination of the story that seems like all is lost.
But wait, there is a third act twist. A very astute businessman with a great reputation, experience in HONEST retailing and an innate desire to see good triumph over evil may be moved to save the day. He may have even wondered why, over his life, he has been trained in such diverse disciplines that now show themselves to be perfect for such an immense task. He has stepped in when other faltering operations were dying and brought them back from the brink of death by applying the lessons learned in that lifetime of diverse training, these were just practice.
So by researching, (perhaps bankruptcy records or vendor cooperation) the top locations and bringing together a solid plan with a totally modern business model a nucleus (say 10/20 or so) of a new chain of Christian stores could emerge. There is large and powerful support out there for a mission of this type that the astute businessman is unaware of. Don’t fear the reaper (age). This would only be the beginning…..
https://www.youtube.com/watch?v=yen7UVKTWC0
Please click on this CBA (Christian Booksellers Assoc.) link and find another store near you. https://cba.know-where.com/cba/
Find (us) little guys who are holding on to the Gospel and our bookstores. Shop at these stores!
I’m not asking that you never shop Amazon again… I am asking you to maybe be intentional about shopping outside of your screen once a month, maybe. Go to a local shop and spend $15 or $20. These bookstores will treasure you & your business more than you know.
They (we) have hung on while Family got free merchandise and could sell it for 50% off -or more sometimes! We are doing our best to do our best and be wise & good stewards. We try to be price competitive, even when the odds are stacked against us by a behemoth company “that was too big to fail.”
Come & check us out! Please.
Well said Ann!
Tell us where your store is and a little about it so we can promote your efforts.
Thanks, Steve! I own Logos Bookstore in Kent, Ohio. My store is part of the Association of Logos Bookstores.
I will truly miss FCB. I love knowing that I can stop in on my way to a birthday party and find a perfect gift. Where will all my fellow Christian procrastinators and I go?? 🙂
However, I will say that a few friends have mentioned that they stopped going because they were uncomfortable with all the upsells being offered during checkout. Those you have a difficult time saying no tended to avoid going there. I wonder how much business they lost vs gained from that policy?? Hmm…
As an owner of local Christian bookstores, one of which has closed and the other is about to, I believe that the problems being experienced by FCS and other stores nationwide lie in these four areas:
1. The millennial generation does not buy or read books. Having grown up with the internet, they have been trained to “Google it” for the answers the seek. Studies show (see the book “The Digital Invasion” by Dr Archibald Hart) that this generation lacks the ability for deep cognitive reasoning due to this. Hence, they are not buying many books. Those from age 30-60 are so busy trying to raise their family, make ends meet, and survive in this crazy world are not finding time to read, and the remainder of us in the 60+ category who still buy and read books… need larger print. Yet the publishers continue to release regular or small print for almost all new printings.
2. Christian products, including gifts, are the fastest growing segments for purchase in “non-Christian ” or secular stores. When you can stop for gas at a truck plaza and buy a Kerusso t-shirt or Christian CD or book, there is little reasons visit a Christian store.
3. Amazon, CBD, and others have certainly taken a chunk of the business and discounted it to the point that they have devalued books. I doubt they Evan make money on their sales, but in the case of Amazon they have diversified from offering groceries to web services and movies. No need to shop anymore.
4. Fear over the election and economy sharply curtailed surplus spending. Surplus is what is left over after you buy groceries, gas, and pay for the ever increasing rates of health care. There is not much left for most folks, and since buying gifts, music and books is not required, it often doesn’t happen. Even with a new outlook in Washington it will take time for folks to feel free to spend their surplus funds again. Oddly, one area that seems to be somewhat exempt from this is restaurant spending, since it is both comforting and required for most of us to eat.
5. If I may add a fifth reason, it is the change in our church and worship experiences from a didactic or instructional experience to one that is performance based with a goal of making everyone feel good about themselves and their religion. I say religion specifically because church for many has become a form of religion while denying, or omitting the power thereof.
Scott,
You make some good points, however, not to keep repeating myself, but I disagree about your first point. Millennials get a bad rap in a lot of areas that bear no relation to reality, the idea that they don’t read being one of them. Case in point:
https://www.theatlantic.com/technology/archive/2014/09/millennials-are-out-reading-older-generations/379934/
The fact that millennials don’t buy books from Christian books stores says, I think, more about Christian publishing than it says about millennials.
They desrve to close. They are commiting fraud. I went to the store in Cedar Hill Texas and bought a bible, I noticed that it had a gold tag on the lower right side. I just assumed it was for engraving. I got it home and upon closer inspection I seen the tag was a sticker. I peeled it back and SOMEONES NAME WAS ENGRAVED ON THE BIBLE!
THEY PUT THE TAG ON THERE TO HIDE THE ENGRAVED NAME! They then sold the bible at full price not telling consummers that this bible has been engraved.
I am returning the bible today. This IS FRAUD. THEY DESERVE WHAT THEY ARE SOWING.
I definitely won’t go as far as you’re saying that they ‘deserve what they are sowing,’ but I’m incredibly disappointed in the same thing that just happened to me! I purchased a study Bible about two years ago in Arizona that also had that gold tag on it for engraving. I never went and did it but noticed it starting to peel the other day and found another person’s name engraved on it as well! Talk about disappointing! I wanted to call them about it but they’re all out of business now. I’m just sorry to hear this was common practice with them.
I believe some of their prices were to high and many would go else where to buy their books or bibles. Even when they would discount some of their products they would still be high. I think this was part of their problem in managing their stores. So sorry to here that the stores are closing.