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By Peter Biggs and Jim Coggins
FACED with a high Canadian dollar and various challenging market forces, Canada's largest Christian bookstore chain has closed almost half of its stores across the country.
At a meeting last week Thursday, creditors "thoroughly endorsed" a restructuring plan that will see Blessings Christian Marketplace close 11 of its 23 stores. Blessings will continue to operate four stores directly -- in Chilliwack and Langley in British Columbia and Calgary and Edmonton in Alberta. Eight others will continue under independent ownership.
"Our aim has been to try and keep as many stores open as possible in communities," said Mark Hutchinson, who co-owns Blessings with his wife Angela.
The Hutchinsons, who are based in Chilliwack, have had to face tough realities in recent months. In an interview late last year, Mark said Blessings had "filed for creditor protection under the Bankruptcy and Insolvency Act."
The Hutchinsons purchased the Blessings chain in 2006 from Les and Debby Reynolds, who had founded it 19 years earlier. Greg Wasmuth, owner of Pilgrim Book and Bible in Vancouver, said the Hutchinsons bought the chain "at a terrible time, when the whole industry is under stress."
There are about 700 Christian booksellers in Canada, many of them independently owned. All are facing a number of challenges.
Exchange rate
Perhaps the most serious problem is the rising Canadian dollar. Hutchinson told CC.com in an earlier interview last fall, "Sales were good till mid-September. Now we're in decline. The market, the stores, the customer base is all unchanged; the only thing that is different is the high dollar."
The high dollar means Canadian retailers have to sell old inventory, purchased from the US with a weaker dollar, at current exchange rates. "I buy a book for $10 in September, and sell it for $14. I can now buy that book for, say, $8 -- and thus sell it for $11.20," said Hutchinson. "We have employees and stores and other overhead; selling a $10 book for $11.20 is zero profit."
Margo Smith, managing director for Winnipeg-based Hull's Family Bookstores, told CC.com that even if Canadian stores survive the transition and can get their new inventory at lower prices, the drop in the price of US books means that the stores "need to sell 20 percent more books" just to achieve the same gross revenue.
N.J. Linquist, founder of The Word Guild, an organization representing about 300 Canadian writers, suggested that the exchange rate is a problem because the stores primarily sell books published in the US.
She said there has been some progress in the last four or five recent years in establishing a viable Canadian Christian publishing industry. However, the US still dominates the worldwide Christian book market, and Canadian Christian book distributors "exist to bring product from the US."
Even Canadian writers often seek US publishers in order to reach a sufficiently large market.
Wasmuth said that even though Canadian Christian booksellers might prefer to sell more Canadian books, "We're not trendsetters." Booksellers need to sell the books that people want to buy, often heavily marketed US titles, or go out of business.
Les Lindquist, chair of the board of Christian Info Canada, parent organizer of The Word Guild, told CC.com, "We're sorry that the new owners of Blessings have had to go through this period of adjustment, and that people have lost their jobs as a result. It's disappointing for us as well, as a few of our members had begun to get their books into the stores. Hopefully we can forge a stronger partnership with the stores that come through this dramatic change so that we can work together to bring quality Canadian Christian books to the broader audience in Canada."
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Big box, online competition
Hutchinson also cited increasing competition from big box stores such as Costco and Walmart, which operate on a different financial level. "They buy the cream of the cream -- and can afford to only mark it up by 13 percent," he said. "They buy sheer volume, and can often even negotiate to return unsold product."
Wasmuth said this leaves the Christian bookstore selling only the less popular Christian books and without the draw of the best sellers which used to bring buyers into the stores.
While on one hand it is a good thing that Christian books are reaching a new market in secular bookstores, it threatens the existence of Christian bookstores, which sell the less popular and sometimes more thoughtful titles.
Some publishers and distributors are also bypassing bookstores altogether and selling high-volume books, such as pew Bibles, directly to churches, said Wasmuth.
Another problem is that online purchasing has mushroomed, and physical stores -- with all their overhead -- cost more to run.
Online purchasing has especially had an impact on music sales. Young people especially are downloading music off the Internet rather than buying CDs in bookstores. In the last two or three decades, music sales had become a lucrative part of Christian bookstores' sales, but this is rapidly declining.
The situation far from hopeless
It remains to be seen whether other Canadian Christian bookstores will also succumb to the challenges that have claimed some of the stores in the Blessings chain.
The umbrella organization Christian Booksellers Association Canada itself disbanded in April 2007.
Other bookstore owners expressed sympathy for the Hutchinsons. However, some noted that, particularly because it was a relatively new chain, Blessings may have been impacted by recent challenges more than some other stores.
Smith noted that Hull's has been in business for over 90 years, and "we're not going anywhere."
Canadian Christian bookstores are often "doing better price-wise than the public perception," said Smith, adding that Christian bookstores can offer some things that other shopping channels don't, such as "more selection, a positive shopping experience and a Christian environment."
Wasmuth agreed, stating that Christian stores offer knowledge of the product, the right things in stock and a willingness to bring new product in through special orders. "Service sets us apart," he said.
One thing that could revive the Christian bookselling industry is a genuine spiritual revival, said Wasmuth. He noted that his best customers are people so excited about their faith that they buy multiple copies of books. "When the Lord is our number one priority, then buying and giving away Christian literature and music becomes a priority," he said.
Ministry the bottom line
The Christian bookstore owners CC.com talked to, while recognizing that their stores have to succeed as financially viable businesses, uniformly said that what motivates them is the opportunity to do ministry.
Hutchinson, who has also been a pastor, said he has a vision of bookstores as community Christian resource centres. "We want to be so much more than simply a retailer. We seek to be a type of ministry, a place that is trying to build community and complement the work of the local church," he said.
Speaking in late 2007, he said: "Blessings doesn't make any profit. In fact, last year, we gave away $20,000 to Christian ministries. We also host events, bring in authors and musicians and have in-store events. It blows me away when we get letters from people whose lives were changed by the products we sold."
January 31/2008
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