In case you missed the news, last Tuesday the court approved the sale of the Family Christian Stores (FCS) to FCS Acquisitions. The new owner is basically the previous owner since Richard Jackson was part of that company too (which I have written about before-click to read).
This sale, in essence, wipes clean over $120 million in debt that the stores owed. Their $75 million in assets will be purchased for an amount between $52.4 million and $55.7 million (finally tally determined at closing).
The publishers and suppliers (vendors) who were owed money had to vote to approve the sale and they did by a vote of 162-7. These vendors will receive a small portion of what they were owed. For example, if they had inventory on consignment at the stores (which FCS technically never owned) they will receive 35 cents on the dollar. For inventory that was never a payment the vendor will recieve around 15 cents on the dollar. While not much, it is more than any vendor would have received had the stores gone into liquidation.
Will 266 current locations the FCS management says they plan to keep more than 90% of them open, so expect some closures in the near future. This is not unusual in a situation like this as many of those stores may have leases coming up for renewal or the under-performing already.
Unfortunately a bankruptcy can have a domino effect on their vendors. A week ago Friday, Gospel Light Publications, a venerable publisher of church curriculum and Vacation Bible School curriculum declared bankruptcy (read this Wall Street Journal blog for more information). One of their reasons was that FCS owed them $143,000 and that loss, coupled with other challenges, made them unable to meet their financial obligations. This means printers, designers, staff, freelancers, and other will not be paid either. Dominos continue to fall.
For those of us in the writing community (agents and their author clients) we are still in a season of seeing the impact of the FCS bankruptcy on smaller royalty income for some clients. Since the publisher wasn’t paid, the author doesn’t get paid. So far the impact has been modest for most authors since FCS had been highly selective in the titles they have carried in their stores.
I am glad this is over so you don’t have to read my blogs about it any more! Seriously, it has been difficult to watch. We never like to see financial struggles. Especially in a business we love and participate in.
My hope is that the Family Christian Stores can use this to become a powerful tool in God’s kingdom. It is a tough retail environment out there.
If not, we may have to read about this again in the future…
Thanks for walking us through this process. I feel terrible for Gospel Light Publications and their employees.
I hope Family Christian Stores can make it work this time.
Thanks for the update, and the clarity with which you presented the information through the whole process.
Time will tell for the future, but meanwhile it may behoove us, as Christians, to realize that we have a responsibility in keeping places like FCS alive.
That online shopping will take over is treated as inevitable; it’s not. It’s a choice. We can choose FCS, or the local Christian book-and-music store over Amazon. Sure, they have less inventory, but they can order for us.
Yes, it costs more. But when did we start putting a limiting value on keeping a faith community alive?
Jeff Bezo, is not about making Amazon the tool to improve our lives; he’s interested in making money.
We’re the ones who have to choose to improve our lives, and in the stories of places like FCS and Borders, we are failing.
I hate seeing that another business had to close because of this. As an author, I know I won’t be shopping at FCS because I want to make sure my writer friends get paid, but I hope enough of the reading public shops there to keep them going. And here’s hoping they turn things around and become stronger than ever.
Please do not boycott FCS stores. It will have no effect on the 15 – 35% that authors will receive for their works already in FCS inventory. Books entering their inventory going forward will receive their regular royalty payment if the new company succeeds. A boycott can cripple and possibly kill the company. That will trigger another bankruptcy and a new round of nonpayment to authors whose books become part of inventory after the restructuring under new management. If anything, it’s more important than ever to shop at your local FCS, as Andrew pointed out. It’s trying to recover from a near-mortal wound. Don’t starve it to death as it tries.
They defaulted on $120 million in debt. That is money they owed that they didn’t pay. That is essentially stealing. I will never understand bankruptcy. Yes, it has negative effects, but it basically allows individuals and companies to run up a huge debt that they do not pay, and leaves the people who trusted them holding the bag.
I will not support a company with such business practices, let alone one that claims to be a Christian company and does this. It’s the companies that they shafted that I feel bad for.
I’ve been waiting to read your update Steve, as I knew it would be reliable. Thank you.
Interesting information.
I hope FCS succeeds this time. It is becoming more and more difficult for all brick and mortar bookstores to survive.
I had never thought about the impact on agents and authors (loss of royalties, etc).
Thanks for giving us an update.
This grieves me so much. My first two nonfiction books were with Regal. They were like family (our editor still is) to us, me and my co-author. How often do you get to meet with a team like this who walks beside you and prays over you? They literally did this when we came to a marketing conference at their headquarters—laid hands on us and the other authors there and prayed for us.
Now to see GLP going away…breaks my heart. Gospel/Regal was a ministry for those folks. We need revival not only in our churches but in this industry. LOL! Now there is an awesome thought. 🙂
Dineen,
Just a quick reminder to all, in case there is confusion.
Regal Books was the trade book division of Gospel Light Publications. Regal was sold to the Baker Publishing Group in 2014. The titles are now part of the various imprints of Baker. A majority of the Regal books are now under the management of Bethany House.
Meanwhile Gospel Light Publications continued to operate their education and curriculum business. According to the Wall Street Journal article linked above, their annual sales were around $7 million. So to lose $143,000 in the FCS bankruptcy in a company that size, is very significant.
GL has been around since 1933 when it was founded by the amazing Henrietta Mears. Billy Graham called her “One of the greatest Christians I have ever known.”
I come here to learn because I get not only information but the way you present information. There is a tone of humble, kind, gentle with precise, timely and important.