New owners’ plan to give 100% of profits ‘a potential model for other retailers to connect customers with ministry’

Family Christian Stores’ management team has partnered with a group of Atlanta-based Christian businessmen to acquire the company from its private equity owners, with plans to give 100% of its profits to benefit Christian charities. 

Terms of the Nov. 13 transaction—involving the nation’s largest Christian retail chain with 280 stores and about 4,000 employees in 36 states—were not disclosed. Family Christian reported that while its ownership structure and financial purpose has changed, its operations will continue in a largely “seamless” way, said Cliff Bartow, CEO of the company. No immediate changes were expected in management.

Under the new ownership, the Grand Rapids, Mich., chain has pledged to contribute 100% of its profits to Christian causes, mainly ministries serving widows and orphans both in the U.S. and abroad. 

Family Christian’s James Fund charity was founded in 2003, sponsoring mission trips with staff and giving $7 million to organizations and projects caring for widows and orphans, company officials said. 

While the investors live in the Atlanta area, the chain will continue operating out of its Grand Rapids, Mich., base. The investment group includes Richard L. Jackson, founder and CEO of Jackson Healthcare, the nation’s third-largest health-care staffing company; Larry Powell, president of Powell Family Enterprises, a private equity investment company; and Michael Kendrick, founder of Blueprint for Life and Ministry Ventures, a nonprofit organization dedicated to launching new ministries. 

“Each of these men have been blessed with professional success and share a mutual calling to give back to help those in need,” Bartow said. “This alignment of business acumen and Christian calling led them to the collective decision to join with us to acquire Family Christian and move it from an organization that contributes 10% of its profits to one that contributes 100% of its profits to faith-based charities and ministries.” 

CBA President Curtis Riskey said he is “excited about how Family Christian is taking an innovative approach to business that is strongly ministry driven.”

“As an extension of The James Fund, this is a potential model for other retailers to connect customers with ministry and outreach through Christian resources and Christian stores,” he said. “As the role of the brick-and-mortar store changes, this is an innovative approach to further God’s kingdom through retail and creating a place that is about more than just selling products. … This news reinforces the optimism for even greater service and ministry impact through Christian stores.”

Bill Nielsen, chief operating officer of Berean Christian Stores, applauded the buyout. 

“I am pleased to see such a focus from them,” he said. “Family Christian was the last chain to be held by secular ownership, so it is great to see them now moving towards where other chains and independent operators have been for years, where many of them already give most if not all of their profits to charity. 

“Family Christian, will no doubt, be very committed to maximizing their profits and charitable giving,” Nielsen added. “As one who has served on their executive team in the past and has seen ownership of the company change hands multiple times, their challenge will have less to do with store count and more to do with cash flow, and how the new owners have funded the buyout and the finance expenses that could potentially reduce profitability.”

 Munce Group President Kirk Blank said he was “pleased to see the announcement of the new ownership” being “like-minded.”

“Like many of us working in this industry, I got my start as a receiving clerk at Family Christian Stores—back then it was called Zondervan Family Bookstore,” he said. “I enjoyed a variety of roles within the organization, and loved the impact Family has on the industry and communities it serves. Time will tell, but it appears that the new owners have a desirable goal of impacting ministry.”

Private equity-owned since 1994, the company was founded in 1932. Family was “interested in getting off the private equity treadmill,” Bartow told Christian Retailing, so when he met the investors through his work with orphans, the option came to the fore. “We were looking for like-minded ownership,” he said.

Profits will be coursed through Family’s nonprofit James Fund. 

“It’s really important that the associates of Family Christian that are involved in these nonprofits to have the ability to direct and have a voice in where the money goes because it’s really important that money goes where you have some interest and activity,” said Jackson, now sole member of The James Fund.

 Bartow added: “Literally we’ve touched millions of orphans’ lives over the last eight years, and we’ve given away about $7 million since its inception in 2004.” 

Donating 100% of profits means that management still will be focused on how business is going.

“Since we’re giving 100% of our profits away, we want to invest our capital in ways that maximizes our ability to give in the future, and if that means spending capital on new stores, we’ll do that,” Bartow said. “If it means spending it on other things that can grow our revenues in better ways, then we would invest it in that fashion.”

Family continues to be committed to its brick-and-mortar “lifestyle stores,” Bartow said, though e-commerce is also excelling. Customers will also find four new digital devices in its stores in time for the Christmas season. The company has partnered with Kobo to utilize its technology as a digital leader and has chosen to drop its recently introduced Edifi e-reader.

Six new stores have been opened recently or are opening this month, including one in the Philadelphia area, the chain’s first in that market. Relocations of existing stores are continually being evaluated.

“We’ve relocated over 100 stores in the last decade, so it’s something that we do routinely and we will continue to do on a needs basis,” Bartow said.