Will Family Christian Stores Ever Open Again
Family Christian Stores Closes All Locations
Concluding 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 sorry day for Christian retail. In this case, the but surprise is that it came so presently after their previous bankruptcy reorganization.
In February 2015 FCS suddenly declared bankruptcy and it was non until June of that twelvemonth that the terms of their reorganization were finalized. I wrote about this frequently hither, here, and here. The bottom line is that, in the end, FCS was able to wipe abroad over $120 million in debt and was able to buy $twenty one thousand thousand in consignment inventory at 70%-90% off the wholesale costs.
In other words, their reorganization immune them to get-go over with "free" inventory in their stores and without debt.
In the terminal 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 one thousand thousand for fiscal 2015. Until more is revealed I cannot speculate what their sales have been in the terminal 18 months…other than to land the obvious…information technology wasn't enough.
What Happened?
There is a crucial question of whether the business model of the retail Christian shop 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 concern that you lot come across from other retailers—closing unprofitable stores, focusing on more profitable merchandise, etc.? In June '15 they had 266 stores. Now they have 240, co-ordinate to the press release. Apparently they did close a small number of locations and moved some others. But what almost all the other aspects of retail? A proper product mix to meet the needs of their customers? Acme level staff training in stores? Reduced overhead at the elevation levels of corporate management?
FCS was given a bang-up opportunity for a reboot with their bankruptcy. They no longer had any debt. They had a big greenbacks 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 feel, sales connected to decline. In addition, we were not able to go the pricing and terms nosotros 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 shut. 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 of import factor in the Christian community.
Retail is Non Dead and Neither is Christian Retail
Before anyone declares Christian retail is "dead" we must first reply the above "what happened?" question. I know of many Christian retail bookstore operations that are healthy and strong so be conscientious of blanket claims of Armageddon.
However, as I've said elsewhere, there is no question that Family unit Christian'southward closing volition have a "deleterious effect on many communities which take relied on their local store for their Christian products, whether information technology exist a greeting card, book, or Bible." There may be a number of cities where the business concern volition merely 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 shop model, it is a shame. This has been a long-standing manufacture serving the Christian market very well. For case, people making a lifetime purchase of an expensive Bible, want to see and feel it before buying 1. This tin 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 Authentication or American Greetings racks. But books and music are easily found online or in a church building'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 notice the right one for their grouping. It is a identify where a church can get the supplies they need for Sunday'south service and weekday ministries. A place where a pastor or a seeker can review hundreds of books on diverse topics. I have also said it is a place where there is an ecumenical meeting every mean solar day, but no one realizes it. Every flavour of the Christian church building 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 endmost of ii distribution centers and 140 store locations (approximately xv% of the chain) while also offering early retirement packages to half dozen,000 employees. They are not lone. The Limited closed all 250 locations in Jan. Wet Seal announced the closure of all 171 locations. American Dress all 110 locations. Last twelvemonth Macy'south announced the closure of 100 underperforming stores. Kmart volition be closing 108 locations and Sears 42 locations (and sold their Craftsman brand to Black & Decker).
Retail business organization is ofttimes a frail venture. Physical stores are not the only ones field of study to disruption. Online operations are too at risk. For example, NastyGirl.com, an online clothes company, grew from a home-based eBay business in 2010 to nearly $100 1000000 in sales in six years. And even so in Nov of terminal year they alleged defalcation and the make was sold for $20 million.
Remember, notwithstanding, that shop closures brand the headlines, not store openings. For example, Walmart will open, relocate or expand 59 Walmart and Sam'due south 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 near the difference in leadership by those who are entrepreneurs and innovators and those who are more "standard" business concern managers. Sometimes entrepreneurs and innovators are non 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 nosotros read and write about. In retail, information technology can no longer be "business equally 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.
Superlative level, bestselling authors, were in the stores, but the inventory choice did not run deep. FCS as well carried a express fiction section, bestsellers mostly.
In its heyday Family unit Christian was every bit much as x% of a Christian publisher'due south business. Now it is a small fraction of that.
Those who publish Bibles (HarperChristian, Tyndale, B&H, Crossway, etc.) volition 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 express their financial exposure to FCS. All the same, whatsoever loss is regrettable.
I hope that there won't be a chain reaction of subsequent bankruptcies or undue fiscal stress on publishers or gift suppliers. For example, due to the 2015 defalcation of FCS, Gospel Light Publishing lost $143,000 and had to declare their own Chapter 11. They subsequently sold their curriculum assets to David C. Melt Publishing.
It is also a deplorable day for 3,000 Family Christian employees and their families. Pray for them too.
Source: https://stevelaube.com/family-christian-stores-closes-locations/
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