Family Christian Stores Stay Open

If you’ve been following the Family Christian Stores (FCS) saga since February, you know that two of the most authoritative sources on this — both of whom posted a summary of last week’s hearings — have been the West Michigan website MLive, and the publisher agent Steve Laube’s blog. From the latter, we get this summary:

• Stores will stay open
• Trade creditors will get 5% of what they are owed plus 100% for all of the sales made within 20 days of the bankruptcy filing.
• Owners of consignment inventory will get paid for a percentage of their inventory, somewhere between 10-35%, depending on circumstances.
• The main secured creditor will get paid 100%.
• Another secured creditor will take a large write-off.

The decision reached last week is still subject to court approval, which includes a challenge by the second-place bidder; plus a stipulation that consignment vendors call off their lawsuit.

Steve Laube summarizes everything with much wisdom:

With any situation like this there is good and bad. The bad is rather obvious. A lot of publishers and vendors are severely hurt by this bankruptcy.

The good, if you will allow me to characterize it as such, is that if the bid is approved by the courts, the stores will stay open. That means future business will occur. In the long run, this may be a wonderful thing. Whether FCS can survive in that long run amidst the ever changing nature of retail is a different question entirely. This situation has demonstrated the fragile nature of the brick-and-mortar store. Unless some changes are made we may end up in the same boat a few years from now. But, in the meantime, having 266 places where books, bibles, music, and gifts are sold is a positive thing.

Unfortunately that “good” thing had to be rebuilt on the backs of hundreds of publishers, vendors, suppliers, authors, and artists. Many of whom will not have the ability to survive their own bankruptcy.

It is easy to create villains and heroes in any story we tell. Rarely, in a situation like this, do we know the full picture, the motivations, or what has been negotiated behind the scenes. My hope is that somehow something good in the long run will happen to turn this into a long forgotten bad dream.

For earlier reporting on his blog check out: blog #1 and blog #2. There is also a report at the CBA website.