R. G. Mitchell Family Books, Canada's largest Christian book wholesaler and retailer, declared bankruptcy in early September leaving over 150 unsecured creditors and $9 million in liabilities. The 74-year-old company has remained tight-lipped about reasons for the closure, and its sudden shutdown left many booksellers scrambling to find alternative distributors.
“It's been crazy,” said Harold Maier, owner of Heritage Christian Bookstore in Niagara, Ont. With churches gearing up for a new Sunday school year and Christmas on the horizon, it was not a good time to lose a main supplier, he added.
The bankruptcy was another blow among ranks of struggling Christian distributors. It followed weeks after major Canadian music distributor CMC Distribution was acquired by David C. Cook Distribution Canada, a division of Colorado-based David C. Cook Publishing. And the Blessings chain of Christian bookstores filed for credit protection last year, declining from 27 stores nationwide to four in B.C. only in January.
Denominational retailers have also taken hits. The ailing Anglican Book Centre was swallowed by American Lutheran publisher Augsburg Fortress last year, and 2008 has seen Christian bookstore closures in Halifax, North Sydney and Montreal. Competition from discount chain stores, online purchasing, and a declining Anglican population have been cited as root causes.
The Presbyterian Church's Book Room has been in the red for many years and relies on funding from the WMS to keep afloat.
The blame falls on a strong Canadian dollar. Wholesalers and retailers alike purchased stock from American distributors when their dollar was high, but when it plummeted retail prices followed suit. To stay competitive, companies were forced to sell the same items for 20-30 per cent less, resulting in a dramatic drop in profits.
“It was a double whammy,” said Blessings owner and CEO Mark Hutchinson. “We saw that signs were bad, but we reacted and made a move quickly.” The chain completely restructured its business model, decreased its number of locations and expanded the range of products on its shelves. CMC Distribution likewise entered into talks with David C. Cook Canada last October, and the company's staff and structures were integrated earlier this year. Mitchell's may not have adjusted to market trends, and may not have acted fast enough, Hutchinson said.
Store rental costs may have been another factor in Mitchell's downfall, suggested Steve Nicolle, former President and CEO of CMC Distribution and current Director of the Music and Media Division of David C. Cook Canada. Most struggling retailers have been in larger urban markets, and over the past year many stores have closed in cities like Calgary and Edmonton. Mitchell's operated a number of retail stores before the bankruptcy, including two former Blessings locations.
A strong dollar has meant cheaper books for consumers, but that does not mean people buy more books or purchase them at stores, said Susan Clarke, manager of the Book Room at national offices.
Although the Book Room accepts online and telephone orders, and provides free shipping across Canada, “it seems like people's first reaction is to go to Amazon,” she said.
“The problem we have in Canada is, although we're a huge geographic country, we're no larger than California in population, but we try to function with as many distributors as in States,” Hutchinson said, suggesting that fewer distributors carrying a larger range of products would be a more viable model. Given recent trends, that may become reality.
