Some news bits that relate to writers who do books in CBA…
First, Family Christian Stores may, in fact, survive… and thus surprise everyone in Christian publishing. As previously talked about here and here, FCS was in danger of shuttering its 266 stores due to declining revenues, a tough publishing market, changing tastes among people of faith… oh yeah, and an inability to actually run the whole operation as a profitable enterprise. They did $230-million in business last year, but the Richard Jackson-owned chain had wracked up $127-million in debt, owed publishers $14-million, had $20-million in consignment merchandise they hadn’t paid for, and were basically swimming in a sea of ill will. Two companies that specialize in killing businesses, Gordon Brothers and Hilco Merchant Services, were pushing to have the court declare FCS bankrupt, so they could sell the remaining stock for pennies on the dollar and close the stores. Instead, the judge had the company go through a sale, then nixed it when he found out the CEO of the company, Chuck Bengochea, was making secret late-night phone calls to Mr Jackson to apparently map out an insider strategy in violation of the law, then set up a NEW sale, and this time it’s got a buyer.
Second, the buyer of Family Christian Stores is none other than Mr Richard Jackson and his new company, FCS Acquisitions. Um… go ahead and read back over that if you need to. We’ll wait… Okay, you with me? Yes, Mr Jackson, who made a fortune in health care, and who purchased FCS and more or less ran it into the ground, then tried to form a new company to buy his old company but got slapped down by a judge for what was termed “reckless… insider” moves, has formed a NEW company, and that new company is buying the OLD company — and thus allowing it to get out of some bad leases, to start afresh with some accounts, and to do what we used to call on the playground “a do-over.” For those who pay attention to this sort of thing, he tried this before, offering to pay as little as $28-million to try and gain control of the company and its assets, but there was a hue and cry against it. This time, he’s putting up nearly $55-million, paying back a fair portion to publishers, and settling with all those consignment folks who felt cheated.
Third, the CBA publishers basically went into court and, no doubt looking as glum as possible, agreed to the plan. I can’t imagine anyone in leadership at a CBA publishing house is high-fiveing over the current regime remaining in control, but it’s better than having 266 retail outlets for their books completely shut down. So they all coughed, made grimacing smiles, straightened their ties, and agreed this was an okay plan. And it is. (Feel free to pop that cork in celebration!)
Fourth, it looks like the bulk of the FCS stores will remain open, and many of the 3100 employees will retain their jobs. That’s actually very good news for Christian writers, since CBA publishers have been slow to move their focus away from brick-and-mortar stores. Christian authors rely on the stores to help get their books in front of readers, so having 266 stores (or however many actually survive — word is FCS will shutter at least 20 locations) is better than nothing.
Fifth, one of the really bad aspects of this bankruptcy has been the impact on consignment vendors, who were still taking their wares into the stores when it was on the brink of collapse because, well, apparently the leadership at FCS forgot to tell them, “Oh yeah, if you bring that in here, we won’t actually be able to pay you for it.” Those vendors banded together, filed suit, and its been the nastiest part of the proceedings. FCS had $20-million in consignment inventory that was, in essence, going to be stolen from vendors. The stores have sold about $6-million of it, and are settling on the rest. (And, while people will try to put a happy face on this, the real reason everyone agreed to this plan is because if the liquidators step in, nobody gets anything. Or, as one business owner put it to me, “With the old plan, we got Jack Squat.” You can just feel the love and enthusiasm, can’t you?)
This should all get settled in mid-August, with a “new” ownership, new leases (that will certainly save the company money), the closing of some money-losing stores, and some fresh capital to try and save the business. Will it work? Beats me. They’re claiming they have “improvements” that will make them more “productive” and “valuable.” Maybe they do — I hope so, since I represent authors in the genre who really could use the shelf space to promote their titles. I’d love it if the stores shrunk, started focusing on books instead of John 3:16 socks and Precious Moments Statuettes, and found ways to build readers. But the past ten years have shown us that bookselling is a tough business, and possibly more of a small mom-and-pop business than a big, superstore chain business. So here’s to you Mr Jackson, and Mr CEO Bengochea (assuming you can refrain from making any more late night calls and stay out of jail). None of us are actually rooting for you — but many of us are rooting for your stores to succeed.
Would love to hear about your great local bookstore. Where are you buying your books?