At a time when many mom-and-pop Christian bookstores are cratering, a quiet business boom is taking place from an unexpected quarter: churches.

Though sales figures and quantifiable data are hard to come by, a few key sources PW spoke to believe church bookstores represent the fastest-growing segment of the Christian bookselling market today. PW's recent consumer study revealed that 15% of Protestant Christians do at least some of their book shopping in church stores.

Some estimate there are 4,000 Christian bookstores nationwide, though many publishers and distributors place the number of viable stores much lower—perhaps under 2,000. Some Christian stores may be mom-and-pops struggling to survive, others are thriving independents that found a strong niche market, and almost certainly many are church bookstores—quietly racking up sales and perhaps even making plans for expansion.

Larry Carpenter, general manager of FaithWorks, a Nashville distributor of Christian books, said that of FaithWorks' 1,500 direct bookstore accounts, it's anyone's guess how many are located in churches. "For instance, Harvest Bookstore in Houston is one of our largest customers," Carpenter said. "But unless you knew they were run by Second Baptist in Houston, you'd think it was a regular store." Like all wholesalers, FaithWorks does its best to sort out legitimate church stores from those who "simply want to get cheap stuff for their memberships"—on a tax-free basis.

"With the calls and inquiries I get, I believe [the church market] is huge," said Geni Hulsey, director of the Garden Bookstore at Houston's First Baptist Church. The 11-year-old store, which fills 2,000 square feet inside the church's main building, posts sales of $500,000 annually—the level of a successful midsize independent. Hulsey sells books at full price even though the store is not-for-profit. Both a friend of independents and an advocate for church bookstores, Hulsey is keenly aware of the tension that exists between church bookstores and Christian indies, and she's made it her mission to help level the playing field. She often teaches seminars at the Christian Booksellers Association's annual convention to educate on both sides of the retail divide.

Hulsey's advocacy of church bookstores began when she attended her first CBA meeting and "found out that church bookstores were indeed a pariah," Hulsey told PW. She discovered that many churches undermined local Christian bookstores by operating a book table or token bookstore within the church. "When I found that out, it really rankled me, and I set about to deep-six that reputation," she said. "I thought, No, we're starting a real bookstore. When a church calls me and says they want to start a bookstore, the first question I ask is, 'How close is your nearest independent Christian bookstore?' "

The Garden Bookstore covers its costs, and profits go into the general budget of the church. A member of the Munce Marketing Group, the store today is also an affiliate member of CBA—a designation Hulsey said was hard won. Before 2001, few church stores could meet CBA's eligibility requirements for a standard retail store, said CBA president Bill Anderson. The store had to be open to the public a minimum of 40 hours per week, located in a commercially zoned area, have an exterior sign visible to passersby, advertise to the general public on a regular basis, stock 75% or more Christian product, have business expenses paid for with proceeds from the store's retail operation and incur the usual overhead expenses.

After Hulsey and a few other church bookstore managers lobbied for change, in October 2001 CBA created a new affiliate membership category for church stores. Prior to that time, Hulsey could not get a CBA membership for the Garden Bookstore. "We didn't even have store signage, and I knew at the time there were other viable [church] bookstores that didn't have an outside entrance, but they did more business in less than 40 hours than other stores did in over 40," Hulsey said. "We were a niche market that needed to be recognized."

Anderson said CBA wants to help church bookstores further their impact in the community by running better stores and serving their customers better; at the same time, existing CBA member stores compete on a more level playing field if church stores understand what is necessary and legal for them to do—and what to avoid. He predicts increasing membership in this new affiliate classification as more churches and stores partner in retail operations—"growth in sales, growth in membership, growth in number of communities served, as there are certainly communities in America that have churches but may not have Christian stores," Anderson said.

Turnkey Church Bookstores

Anderson and Hulsey are not the only ones who project healthy expansion for the church bookstore category. Lemstone LLC, the only Christian retail franchiser, has earmarked the church bookstore as its next growth frontier. Beginning this month, Lemstone is rolling out a service for churches that want to create a bookstore but lack the professional expertise to do it. The church store program will not offer franchises but rather a turnkey operation to get church stores up and running.

The impetus for creating the church program came from four existing church stores among Lemstone's 32 franchises, said Lemstone president Scott Macdonald, who bought the company from founder Jim Lemon in June 2003. The four Lemstone church stores opened as satellites to existing franchises, an arrangement that offers a lot of synergy to the host retailers, Macdonald said. "If you're a retail owner and you open a second store, you can share systems, staffing, inventory. The sites can also find requested titles at other sites."

Macdonald calls the existing church store franchise model a "very logical extension" of a local store owner's business because, simply put, "it's where the customers are, and because leading churches want to have bookstores." At the same time, Macdonald recognizes that most churches don't want a franchise because they want to brand the store with their own name or image or even the pastor's name.

"What churches need is exactly what we do," Macdonald continued. "In surveys we've done, churches want to have a store, but many of them don't know how to do retail and wind up losing money. Instead of funding money for the church, the store ends up draining money from it."

Under the church services contract, Lemstone offers its professional retailing expertise for an up-front fee of about $15,000, Macdonald said. An ongoing fee amounts to 10% of the store's revenue. "We will give church stores a much better chance to succeed because we can cookie-cutter the store, help with layout, systems, inventory, lease negotiation—this is stuff we do every day," Macdonald told PW. "We want them to be able to open the door, sell products, lock the door at the end of the day, and go home."

Based on Lemstone's market research, Macdonald said he believes the new program will produce more market demand than the company can meet in 2005. "I envision us opening as many as 10 or 15 church stores in 2005," he added. "The limit will be the constraints on my staff. Growth from there could be exponential—we may service 50 to 100 church stores in the future."

Seeds of Success

Starting out of the trunk of a car more than 25 years ago, Seeds Resource Center, the bookstore for the Chicago area's mammoth Willow Creek Community Church, now carries about 10,000 titles, has two on-site buyers and has earned a place on the "must see" list for all the major publisher reps. The store charges full price and sales tax and pours its profits back into the church, paying for ministries such as Willow Creek's food pantry.

"We're both a business and a self-supporting ministry—we pay our own salaries. Yet we see ourselves primarily as a teaching resource for the pastors and small groups [of the church]," said Cynthia Hoppe, manager of the 5,000-sq.-ft. store.

Hoppe tries "to work with local Christian bookstores. If we can't provide a customer with a product, we'll send them to the local bookstore," she said. "I've talked with CBA about trying to match up churches with local bookstores—they can provide the market Christian bookstores need."

The Great Divide

Despite high aspirations for cooperation between Christian independents and church bookstores, the divide between them is likely to get wider. Some indies are scrambling to connect with churches, pastors and youth pastors to capture what they see as a built-in market for Christian products, but a few in the industry believe many mom-and-pops have already missed the train.

One observer who wished to remain anonymous said, "I think if in past days independents had been servicing churches the way they should have, this [church bookstore boom] never would have happened. But in a practical sense, they stood in their bookstores and waited for the pastors to walk in and need something." Others point to industry studies that blame lack of good signage and marketing for many independents' woes. "A pastor may have a local Christian bookstore right around the corner and not even know about it," Carpenter said. "So out of frustration, he says, heck, let's open our own bookstore."