Family Christian Stores, the country's largest religious bookstore chain, has reached an agreement with Madison Dearborn Partners under which the Chicago-based investment firm will acquire a majority stake in the retailer. Terms of the agreement were not disclosed; it is known, however, that Madison will acquire a large portion of its stake from George Craig, the former chairman of HarperCollins who helped arrange the management buyout of the chain from HC in 1994.
Although Craig will no longer serve as Family Christian's chairman once the deal is completed some time this month, he will remain a shareholder in the company. Les Dietzman, president of Family Christian, said the company "deeply appreciates George's support and guidance" in growing the business. Dietzman will continue as president; no management changes are expected.
Family Christian has been looking for alternative financing since last fall when it dropped plans for an initial public offering due to volatile market conditions. Dietzman told PW that despite the rebound in the stock market, the company decided to seek private financing because "there are distinct advantages to remaining a private company." He added, however, that after Family Christian develops a longer track record, another attempt at a public offering is possible.
The chain reported solid growth in the fiscal year ended January 31, 1999, with sales up 35% to $227 million and profits at record levels. Dietzman expects that Family Christian will add a minimum of 65 stores annually over the next few years through either acquisition or new openings. The company currently operates approximately 300 stores in 37 states.