Thomas Nelson, Inc.
Address:
501 Nelson Place
Nashville Tennessee 37214-1000
U.S.A.
Telephone: (615) 889-9000
Toll Free: 800-933-9673
Fax: (615) 889-5225
http://www.thomasnelson.com
Statistics:
Public Company
Founded: 1798 as Thomas Nelson and Sons
Employees: 850
Sales: $261.8 million (2000)
Stock Exchanges: New York
Ticker Symbol: TNM
NAIC: 51113 Book Publishers; 42212 Stationery and Office Supplies Wholesalers
Company Perspectives:
We are a diverse team of editors, marketers, sales associates, accountants, designers, and countless other employees, working together to improve the lives of customers. We're developing new media and methods to serve the Christian community in all its diversity. Fulfilling with passion a mission 'to honor God and serve people.'
As we stand on the brink of our third century of service, we rededicate ourselves to following in the footsteps of the godly young bookseller and publisher whose name we proudly bear.
We are Thomas Nelson.
Key Dates:
1798: Thomas Nelson publishes The Pilgrim's Progress in Edinburgh, Scotland.
1854: Thomas Nelson opens office in New York City.
1885: Thomas Nelson publishes Revised King James Bible.
1952: Thomas Nelson publishes Revised Standard Version of Bible.
1959: Sam Moore founds Royal Publishers, Inc.
1961: Royal goes public.
1969: Royal Publishers acquires U.S. branch of Thomas Nelson, adopts Thomas Nelson name.
1982: Thomas Nelson publishes New King James Version of Bible.
1992: Thomas Nelson acquires Word, Inc., a gospel music and inspirational book firm, for $72 million.
1994: Company acquires Morningstar radio network and Pretty Paper Inc.
1997: Thomas Nelson exits the music business, selling its Word Entertainment unit to Gaylord Entertainment Company.
Company History:
Thomas Nelson, Inc.--with roots dating to 1798--is the world's largest publisher of Bibles and Bible-related materials. Through its Word Publishing division, it also publishes works by some of the most prominent contemporary Christian writers, including Billy Graham, Dr. James C. Dobson, Max Lucado, Dr. Robert Schuller, Chuck Swindoll, and Barbara Johnson. In addition, it markets a variety of gift and stationery products as well as games, audio- and videotapes, CD-ROMs, and e-books. Lebanese immigrant Sam Moore acquired the venerable Thomas Nelson name in 1969. He and his family still own approximately 25 percent of the company.
Spreading the Good Word, Bible Publishing: 1952-82
Thomas Nelson of Edinburgh, Scotland, founded Thomas Nelson and Sons when he published The Pilgrim's Progress in 1798. His son perfected the rotary press in 1850, and in 1854 the firm opened a U.S. office in New York City. In 1885 the company published an English revision of the King James Version of the Bible. In 1901 it published the American Standard Version. With sales of the Bible central to its business, the firm built a Bible bindery in 1946 in Camden, New Jersey. In 1952 Thomas Nelson published a Revised Standard Version of the Bible.
A man important to the future of Thomas Nelson began selling Bibles door-to-door while studying economics at the University of South Carolina in the 1950s. A Christian Lebanese immigrant to the United States, Sam Moore went on to work at Chase Manhattan Bank for a couple of years. However, he left the bank to begin his own Bible-selling company called Royal Publishers, Inc. in Nashville in 1959. He raised capital and used it to buy Bibles and to hire college students, whom he trained in door-to-door selling methods.
Once his firm expanded out of the Nashville area, Moore began publishing Bibles himself. In 1961 he took Royal public. The firm prospered and began to gain attention in the world of religious publishing. In 1969 a major opportunity presented itself when British interdenominational Bible publisher Thomas Nelson and Sons approached him about running its U.S. operations. Instead, Royal Publishing bought them. The $2.6 million purchase price included the Nelson name, its Bible printing plates, and its U.S. distribution network. The firm did not have a printing plant, and Moore continued his practice of subcontracting print jobs.
The purchase of Thomas Nelson and Sons made Moore's firm, now called Thomas Nelson, Inc., the largest Bible-publishing company in the United States. In 1976 the firm published the Bicentennial Almanac, which sold 600,000 copies at $20 each. In 1978 it built a new distribution center in Nashville. In the mid-1970s Moore spent $4 million having 150 scholars revise the Bible. In 1982 this revision project resulted in the New King James Version of the Bible, which sold so well that it made Thomas Nelson the largest Bible-publishing company in the world. Its principal market was a growing network of Christian bookstores throughout the United States.
New Authors
In 1983 the firm won an important new author when Moore persuaded Robert H. Schuller, already known for his books and television preaching, to let Thomas Nelson publish his next book, Tough Times Never Last, but Tough People Do! Moore shuttled Schuller around on a private jet during a three-week book-signing tour, arranged for publicity in local papers, and helped the book become a bestseller. It eventually sold over 500,000 hardcover copies, many of them out of secular bookstores.
Also in 1983, Thomas Nelson bought a 240,000-square-foot bindery and printing press located near Kansas City, Kansas. Moore felt Thomas Nelson could print its own Bibles and increase its profits. Given its success in religious publishing, the firm decided to diversify into the secular publishing market as well. Nelson paid $2 million for New York publisher Dodd, Mead & Co., which owned the U.S. rights to Agatha Christie's 67 mystery novels and other properties. Both of these acquisitions proved to be mistakes. The U.S. dollar soared in value in 1984 and 1985, making printing inexpensive overseas. Nelson's competitors printed Bibles in Britain and the Far East and inundated the United States with Bibles selling at prices that Thomas Nelson could not match. In addition, the New York publishing business proved very different than publishing in Nashville, and Nelson management soon realized that they did not know how to succeed as a secular New York publisher. The firm lost $5.4 million in 1986 on sales of $72 million, and by then had amassed $40 million in debt.
The firm laid off about half of its workforce of 600. It sold Dodd, Mead and its printing plant and went back to contracting out its printing. The moves saved the company, and by 1988 it was profitable again and looking to diversify. This time, however, it stayed closer to home. The firm realized that the Christian bookstores it sold its Bibles to made about half of their money from selling photo albums, prayer journals, and other gift items, as well as from cassettes of Christian music. Thomas Nelson quickly moved into these markets. Early tapes included Barbra Streisand singing Christmas carols and Johnny Cash reading the Bible. Although Nelson's products were similar to those of its rivals, who had a head start in this market, the firm got its products into stores because of its relationships with the bookstores' buyers--and because it offered greater discounts than its competitors. Gift and music sales only totaled $1.4 million in 1989, but they quickly grew, reaching $8 million in 1990.
Music and Other New Business Opportunities in the 1990s
Thomas Nelson earned $4.3 million in 1990 on sales of $74 million. By 1991 the firm had sold more than 22 million copies of its New King James Version, and had reduced its debt to $12.5 million. In late 1992, Thomas Nelson bought Word, Inc., a gospel music and inspirational book publishing company previously owned by Capital Cities/ABC, for $72 million in cash. The purchase virtually doubled the size of the company. It strengthened Nelson's music business by bringing it several successful singers, including Grammy winner Amy Grant. Nelson's book business benefited from the addition of bestselling authors Billy Graham and Pat Robertson. Just as importantly, Word's distribution complemented Nelson's. Word sold well internationally and had a strong direct marketing presence. The purchase left the firm with only one serious competitor in Christian book publishing, Zondervan Publishing House, owned by Rupert Murdoch's News Corp.
With 'traditional values' and Christianity increasingly visible and powerful in the United States, Thomas Nelson felt it could now sell large numbers of its products in the mainstream mass market. Nelson had already gotten its King James Bibles into Wal-Mart and Kmart, and, with the acquisition of Word and the growth of Christian music, the firm was now able to place other products in mass market outlets as well. It began by convincing retailers to increase their offering of religious goods, such as Christian-themed children's books and Bibles, during the Christmas season. When these offerings proved successful, the stores gradually added Christian pop music, card games, and calendars. In January 1995, Thomas Nelson began showing a 4.5 minute promotional video in 440 Sam's Club stores. In it, Christian author and preacher Max Lucado advertised 'A Time with God,' a book, audio, and video package containing Bible verses accompanied by music by Thomas Nelson's music talent. This strategy proved successful; by 1995 Wal-Mart had expanded its Christian product line in 300 of its 2,100 stores.
Despite the pop-styling of most contemporary Christian music and the increased visibility of Christian issues in the United States, few mainstream radio stations would play Christian music. To get around this limit on its exposure, Thomas Nelson decided to build its own broadcast business. In 1994 it bought the Morningstar radio network in Texas, whose 39 stations had already been playing a lot of Christian music. Within a year, Thomas Nelson expanded the network to 105 affiliates and announced plans to enlarge it further. Perhaps aided by this radio exposure, consumer demand for Christian music continued to increase. In the mid-1990s, Blockbuster Entertainment stores doubled the shelf space they devoted to Christian cassettes and compact discs. By 1995, over a quarter of Christian music was sold through secular stores. Thomas Nelson hoped to sell half of its Christian music through secular retailers, though some industry analysts believed the genre would never achieve that kind of widespread popularity.
In 1994 Thomas Nelson bought Pretty Paper Inc. for 115,000 shares of common stock. Pretty Paper, which had sales of $5.6 million in 1993, became a wholly owned subsidiary. The purchase strengthened the company's line of gift items and its gift-item distribution network. Among other products, Pretty offered two collections of gift stationery, 'Out in the Country' and 'Potting Shed,' both of which sold strongly. Thomas Nelson also sold gift products based on licensed cartoon characters from Looney Tunes and Paddington Bear.
With revenue moving forward on all fronts, the firm made $11.7 million in 1995 on sales of $265.1 million. That year Nelson and Word published 11 books that made it to the top-20 Christian Booksellers Association Hardbound Bestsellers' List, more than any other publisher. The growth of Christian publishing had created entire new genres, such as the Christian thriller, in which characters underwent personal transformations without the sex and violence found in most mainstream thrillers. In 1995, Word sold hundreds of thousands of copies of such books by Pat Robertson and Charles Colson.
Thomas Nelson founded a new division called Royal Media, which included the Morningstar Radio Network and the Royal Magazine Group. The magazine group published four magazines: Aspire, which covered lifestyle issues and celebrities and was sold on newsstands; A Better Tomorrow, which was geared toward older readers; Release, which covered Christian recording artists and targeted those working in the Christian music industry; and Release Ink, which did the same for the Christian book industry. The Morningstar Radio Network had grown to 138 stations in 130 cities. Its digital programming was delivered by satellite 24 hours a day and consisted of two programming formats: adult contemporary Christian music and what the firm called 'High Country.' Nelson announced that it was considering a move into cable TV as well.
The firm's record and music division continued to expand, reaching sales of $89.7 million in 1995. Thomas Nelson acquired the Maranatha! Music catalog of printed and recorded music products and signed a long-term agreement with Maranatha covering future product development. Maranatha specialized in a sub-genre called 'praise and worship music' in which Thomas Nelson formerly had a weak presence. Despite its successful diversifications, Thomas Nelson continued to depend on the Bible as the mainstay of the company's offerings; in 1995 Thomas Nelson published more than 1,200 different Bibles and Bible-related products.
Thomas Nelson in the 21st Century
The trend toward political conservatism in the United States was a major factor in Thomas Nelson's continued success through the mid-1990s. Industry-wide revenue on Christian merchandise reached $2.7 billion in 1993, compared to $1 billion in 1980, and analysts at the time were predicting that sales would exceed $8 billion within ten years. The increased role of mass merchants in the sale of Christian-themed books and music also played a significant role in this growth. Chain retailers including Wal-Mart, Kmart, and Walden Books were responsible for 15 percent of Thomas Nelson's total sales by 1995, up from two percent in 1990. By this time over half of Thomas Nelson's revenue came from book sales, while an additional 37 percent was earned in the music division. The company also retained its position as a leading Bible publisher in the 1990s, controlling over 35 percent of the U.S. market.
However, Bible sales had become stagnant by the mid-1990s, showing only three percent growth over the previous decade. Intent on bolstering this traditional mainstay of its business, Thomas Nelson began planning a new edition of its Contemporary English Version of the Bible in 1995. At the same time it started looking for ways to expand its music and gift divisions. Toward this end, in September 1995 the company acquired C.R. Gibson, the stationery and gift company, for $67 million. In April 1996 Thomas Nelson reached an agreement with Huffy Service First to help merchandise the company's new Stepping Stones line of baby products. The company also launched a number of new magazines during the mid-1990s, in an attempt to keep pace with the nation's expanding Christian readership.
Unfortunately, a sluggish retail market reversed the company's fortunes in 1996. Low sales, coupled with a high number of returns, resulted in a loss for the company for fiscal 1996, and the company's stock value dropped 50 percent from its September 1995 high of $26.25. In addition to a weakened retail industry, analysts cited mismanagement of the music club division, along with a glut of new magazine titles, as key factors in Thomas Nelson's losses. To make matters worse, Bible sales dropped nine percent in 1996, as a glut of new publishers and editions, catering to increasingly specialized readerships, resulted in an oversaturation of the market.
Following a first quarter loss of $1.4 million for fiscal 1997, the company was forced to downsize its operations, selling its Word Entertainment music unit to Gaylord Entertainment in early 1997. The $110 million sale helped ease the financial pressure, and by the following year Thomas Nelson had once again become profitable. Out of the music business, the company began looking for new ways to expand its book and gift divisions. In May 1998 it reached a licensing agreement with Media Arts Group Inc. to help market gift products, and in May 1999 Thomas Nelson Gifts Canada established a distribution partnership with Word Entertainment Canada. With revenues increasing steadily over the latter part of the decade, the company was poised to make a major acquisition, purchasing Nashville-based Routledge Hill Press, publisher of Life's Little Instruction Book by H. Jackson Brown, Jr., and America's Dumbest Criminals, in December 1999. Keeping pace with the information age, Thomas Nelson also became the first Christian publisher to launch electronic book versions of its titles, releasing 17 of its bestsellers online in October 2000.
Principal Divisions: Thomas Nelson Publishers; Word Publishing; J. Countryman; Caribe Betania Editores; Thomas Nelson Gifts; Tommy Nelson; Nelson Bibles; Nelson Word Direct.
Principal Competitors: Courier Corporation; HarperCollins Publishers Inc. (Zondervan Publishing division); The Reader's Digest Association, Inc.
Further Reading:
Caravajal, Doreen, 'The Bible, a Perennial, Runs into Sales Resistance,' New York Times, October 28, 1996.
Chithelen, Ignatius, 'A Brush with the Devil,' Forbes, August 19, 1991, pp. 61--62.
Fiorini, Phillip, 'For Bible Publisher, Sky's the Limit,' USA TODAY, March 7, 1995.
Rotenier, Nancy, 'The Gospel According to Sam Moore,' Forbes, April 12, 1993, pp. 122--23.
Sharpe, Anita, 'Heavenly Niche,' Wall Street Journal, February 6, 1995, pp. A1, A5.
Source: International Directory of Company Histories, Vol. 38. St. James Press, 2001.
