The aftermath of the Family Christian Stores' bankruptcy
The 2015 bankruptcy of Family Christian Stores (FCS) has toppled America’s largest Christian products distributor, Send the Light Distribution (STL), according to a June 1, 2015 article in Christianity Today. STL has shipped Christian books and other products via its global supply chain for 42 years, but the fate of Family Christian Stores, in addition to competition from online stores like Amazon, is causing it to close its doors and lay off 85 workers.
A Grand Rapids-based company, Family Christian Stores filed for Chapter 11 bankruptcy protection in February, 2015. At that time the company stated its debts amounted to $127 million dollars, while its assets totaled only $75 million. Bankruptcy judge John Gregg rejected the initial auction of the company to Family Christian Acquisitions in June, 2015, stating that behind-the-scenes contact between CEOs of both companies had denied fair bidding to competitors. In response, Family Christian Stores’ creditors were asked to vote on whether they approved the chain being sold to Family Christian Acquisitions. Overwhelmingly they voted yes due to the fact that the chain owned and operated 266 stores in 36 states and this distribution network remained a viable asset. Judge Gregg approved that sale in August of 2015, and it was sold debt-free.
As a result Send the Light Distribution had to erase debts of approximately a half million dollars at a time when many of their other customers, Christian bookstores all over the nation, were closing down as well. The Amazon business model of online sales has changed the way people buy books and other products. Offering online reviews and shipping either wirelessly via tablet or directly to the customer revolutionized the way people choose and buy books and other media. This has affected all kinds of brick-and-mortar stores, not just bookstores. Interestingly enough, sales of Christian books remain strong overall, although the sale of Christian fiction has declined some in popularity over the past decade.
Send the Light Distribution was not the only company penalized by the sale, however. Twenty-seven publishers sued Family Christian Stores in an attempt to get their books, music, and DVDs back before the bankruptcy could proceed. How they have been affected by the erasure of the debt has yet to be seen.
Peter J. and Bernard Zondervan began Family Christian Stores in 1931, and it was known as Zondervan for decades. In 1984 accounting irregularities discovered resulted in lawsuits, SEC sanctions, and shareholder losses in the millions. The company was renamed Family Bookstores in 1993 and then Family Christian Stores in 1997.