wfn.org | Augsburg Fortress Will Look at its Business Practice

[Brenda Williams <BRENDAW@elca.org>]

Reply-To: ElcaNews <ELCANEWS@ELCASCO.ELCA.ORG>
ELCA NEWS SERVICE

April 30, 1998

AUGSBURG FORTRESS WILL LOOK AT ITS BUSINESS PRACTICE
98-15-097-AH

     COLUMBIA, S.C. (ELCA) -- The Board of Trustees of Augsburg Fortress
Publishers directed its president to standardize business practices, engage
consultants' help as needed and consider bringing on a chief operating
officer.  The board acted in executive session at its meeting here April
23-25.
     Augsburg Fortress, based in Minneapolis, is the publishing house of
the Evangelical Lutheran Church in America.  In an interview the Rev.
Marvin L. Roloff, president and CEO, said last year's decline in sales has
affected business.  "There is a need for clear reporting of information for
operating inside the publishing house and assuring a more accurate audit of
inventory and of relationships with outside vendors, he said.
     Todd P. Engdahl, Denver, chairs the board.  Engdahl said, "The
publishing house has been going through a long period of modernization,
trying to update business practice and adapt to a changing market.
Augsburg Fortress has gotten out of the printing business, reduced
inventory and centralized distribution.  This is another step in that
process, a continuing effort that has been going on for at least four
years."
     The 1997 audit was not completed in time for the board meeting.
Roloff explains part of the problem is a process under way to switch
computer systems.  "The systems are part of a multi-year computer project,"
Roloff said.  "Work continues on bridging the old and new systems."
Augsburg Fortress moved to a new location in downtown Minneapolis in
December.
     The board action "directed the president to standardize and reinforce
compliance with and accountability for business practices," including
"inventory control, outside vendors, internal auditing, and accounting and
purchasing."
     It said, "The president will obtain consultant assistance in that
effort and consider creation of the position of chief operating officer."
The president will also "continue review of products and product
development and of the house's current and future market and competitive
position."
     Roloff said the action addresses "the use of our materials in the
ELCA and how we respond in the development of new materials.   It concerns
how we will create products that will match the flexibility and
adaptability congregations require in their use of published materials.
This is quite true for all denominations right now."
     Robert W. McNulty, vice president for finance, called 1997 "a year of
modest financial improvement, clouded by the looming threat of continuing
declines in sales revenue."
     The publishing house recognized gains from the sale of the real
estate at its old location.  McNulty said operating performance was
"significantly below planned results for the year due to the decline in
sales as opposed to planned growth."
     Net sales in 1997 were approximately $55.4 million, down 4 percent
from the previous year and 6 percent below planned sales, McNulty reported.
Sales of education resources were down 11 percent, book sales were down 8
percent, he said.  Sale of ELCA-related periodicals and resources was up
more than 3 percent.
     The board approved a policy on business ethics.  Roloff said,
"Employees have been very supportive of the need for a policy and have
given excellent comments."  He said, "We believe it will be very helpful in
building and strengthening the corporate culture we would like to have at
Augsburg Fortress."
     In Columbia the board visited the campus of Lutheran Theological
Southern Seminary where an Augsburg Fortress bookstore is located.  The
board talked about the relationship between the publishing ministry and
theological education.
     Robert R. Hanson, director of the sales unit, said on-site Augsburg
Fortress stores are sought by ELCA seminaries.  The store at Southern has
been active for three years.
     The Rev. H. Frederick Reisz, president of Southern, called the
presence of the bookstore "critical, because we are training Lutheran
students for Lutheran ministry.  They need familiarity with the Lutheran
publishing house and its products.  The faculty sees Augsburg Fortress
books and authors alongside other scholars and writers."
     Reisz said all ELCA seminaries are in "generational transition" as
post World War II scholars move out of teaching.  He  expressed concern
that "younger Lutheran scholars, the new community of scholars, need to
find a way to publish and establish name recognition."
     Reisz stressed the importance of technological competence among
students, faculties and the ELCA's publishing house.  "We tremble," Reisz
said.  "I could probably count on one hand the faculty who know how to
write a CD-ROM."
     Augsburg Fortress has established a new relationship with the
bookstore at Luther Seminary in St. Paul, Minn., Hanson said.  The retail
store in Minneapolis was closed in December when the corporate offices
moved.  Two other stores are scheduled to close this spring, at Hicksville,
N.Y., and Omaha, Neb.  A new store will open in Pittsburgh June 5.

For information contact:
Ann Hafften, Director (773) 380-2958 or NEWS@ELCA.ORG
http://www.elca.org/co/news/current.html