Family Christian is Closing All 240 Stores

Family Christian is Closing All 240 Stores TheWitness.org

A little over two years ago, Family Christian’s debt of $127 million was forgiven so that all 240 locations could remain open. Flash back to the present and unfortunately the world’s biggest retail chain of Christian merchandise has just announced that it will be closing all 240 locations after 85 years of business. Family Christian has employed over three thousand people in thirty six different states among its 240 stores. The chain blames its decline on a change in consumer preference, behavior, and sales. The Family Christian president, Chuck Bengochea, proclaimed that the two years following their bankruptcy have been extremely difficult and proven that the company will not be able to come back from their original loss despite product improvements and assortments.

Family Christian was well aware of their financial issues. Not only did the chain purchase itself back from private equity owners in 2012, they also promised to donate all profits to serving orphans and widows across the world in 2013. However, only three hundred thousand was donated to charities over the two years which was the first indicator of how small the marginal profits had grown. Thus, Family Christian was driven to bankruptcy in 2015. 2014’s $230 million in gross revenues mattered not as the chain still owed over $90 million to the bank.

Family Christian Store TheWitness.org

It did not help Family Christian that over twenty seven Christian publishers declined the chain’s reconstruction plan agreement that outlined $20 million worth of goods be purchased by consignment. InterVarsity Press, Charisma Media, Abingdon Press, Baker, and David C.Cook were just a few of the twenty seven total Christian publishers to deny Family Christian’s consignment deal. The company was also criticized by several other vendors who disagreed with the new terms which heavily benefited Richard Jackson, the owner of Family Christian. He was to be directly paid any proceeds the company came by. Countless creditors claimed that Jackson had schemed the debtors out of $4 million and planned to reduce the company's debt by more than $90 million in twenty days.

This accusation led the creditors to file a class action lawsuit. Family Christian responded by pulling its proposal and headed to auction. At auction three of its four bidders were liquidators. This factor heavily discouraged Family Christian as liquidation only benefits the attorneys and banks. FCS Acquisition was the first to win the auction but a judge deemed the auction process as ‘flawed’ because FCS was found to be an indisputable insider. To counteract the judge’s ruling, Family Christian asked each creditor to vote and and choose between either the liquidators (which would not benefit the creditors whatsoever) or FCS Acquisition. At least with the FCS option, the creditors would only lose out on $20 million; they would still have a platform to sell new products through, and Family Christian would stay open.

Thus leading the Family Christian creditors to a vote where 162 over 7 chose to sell to FCS Acquisition. The ruling helped Family Christian to shed $127 million dollars in debt. $108 million of the settlement went to creditors who aided them in keeping their doors open. However, this was only a short term fix. Family Christian could not adapt to the current retail challenges the market would throw at them soon after. Their fleeting financial health came at the expense of several successful suppliers, authors, and publishers.

Gospel Light Publishing lost $143 thousand in expected income due to Family Christian’s bankruptcy filing and had to file bankruptcy themselves. As a smaller, family owned, Christian publishing company they could not foresee these drastic market changes and have deemed Family Christian (the world’s largest Christian retailer) as a major contributing factor in their demise. Send the Light Distribution was also fatally affected by the Family Christian bankruptcy as they were forced to close down last year after losing over half a million dollars in the insolvency.

As Family Christian closes all of their doors for good, the Christian retail and publishing market will be heavily affected. The 240 locations were depended upon by many communities and companies alike. They were one of the only in-store platforms to provide Christians with bibles, books, and countless other Christian products. This loss is greatly regrettable. Christians and Christian companies will now how to look to other avenues, like Amazon, to find and sell religious based products easily and effectively. The days of in store purchases for specialty items are coming to an end.