Family Christian Stores (FCS), the nation's largest Christian retailer and the primary consolidator in the Christian retail industry with 355 stores in 39 states, will take a new tack in 2001: slowing down acquisitions and new store openings. Family's chief executive officer and president Les Dietzman said the Grand Rapids, Mich.—based chain, which once was on target for 500 locations by the end of 2000, will concentrate its capital in remodeling and relocating existing stores, although Dietzman still sees FCS as a growth retailer. "Companies have cycles, and when the time is right, we will begin growing again," Dietzman said. "Right now we are in a cycle where we are improving our existing stores as their leases come up. But I believe that Family has the opportunity to more than double its existing number of stores in the future."
Dietzman told PW he is "surprised and disappointed" at persistent rumors that the chain is teetering on the brink of bankruptcy. "There have never been any discussions or plans for declaring bankruptcy," he said. "It's never been a consideration or a possibility. We feel good about our prospects and plans going into a new year." He also squelched rumors that FCS is for sale, saying, "This is absolutely without grounds."
Countering rumors of financial difficulties, Dietzman said that despite a tough December that resulted in "heavier than planned for" returns, an "outstanding" November gave the chain a boost. "We just finished our best year ever in terms of sales and profits—far better than most retailers I'm familiar with," Dietzman said. "Our comparable store increases are among the best I've seen for the book and music industry." Dietzman declined to provide details about 2000 results, although he did say that the company has had a 23.6% compound annual growth rate for the past five years. He noted that unlike many other retailers, FCS replenished its inventories during the Christmas season, and "it's basically business as usual now after a Christmas that was not up to anyone's expectations."
Family has closed 14 stores since Christmas and invested the assets in other stores, Dietzman said. He added that these were stores whose leases had expired, stores that were marginal or were underperforming and stores that "we just didn't feel warranted a relocation." Also among closures are several stores acquired in a buyout of the 56-store Joshua's Christian Stores chain in 1998 that were near an existing Family store and whose leases had expired. "We've had very few closings in areas where there isn't another Family store to serve the market," Dietzman said. The last aggressive multistore buyout made by FCS was the eight-store Shepherd Shoppe chain in May 2000, included in Family's 15 total store acquisitions for 2000. FCS opened 13 new outlets in 2000 and relocated 26 existing stores.
FCS also announced it will bring its information systems department in-house after June 30, ending a seven-year outsourcing arrangement with Accenture (formerly Andersen Consulting) in Grand Rapids. Dietzman said that key to this decision was bringing on board Jef Fite, former president of FCS's now-defunct sister company, iBelieve.com (News, Oct. 30, 2000). Fite will serve as senior v-p and chief information officer for FCS and will oversee Family's e-commerce strategy, including expansion of the www. familychristian.com site.
