Georgetown University Launches Bookstore Management Company

Long subsidized by their institutions as necessary money-losers, campus bookstores are now seen as potentially efficient and profitable ventures. As more institutions view their bookstores in that role, they have begun to seek advice about improvements to the operation of the campus bookstore, and available options to pursue those improvements.

Georgetown University has formed a bookstore management company to help institutions improve their bookstore operations.

"The university formed Bookstore Management Concepts (BMC), a subsidiary of the university, in the summer of 1991," said Ron Duvall, president of the subsidiary and director of campus bookstores. The entity was formed to address concerns about institutional store operation, including the option of leasing.

"Three major elements make up the charge of the subsidiary," Duvall said.

Consulting: BMC consults with institutional bookstore managers and reviews various aspects of the existing operation, either as a broad-based overview or by targeting specific processes, Duvall said. "There is really no other source out there for objective answers to the questions that institutions have about how to improve their bookstore operations," he said.
Transition: "BMC can provide the institution with alternatives in the case of an outgoing manager, either by providing trained employees, or by hiring from outside the university," Duvall said. "We can supply one manager, or a management team, and can get things running so that the institution can take over at some point and operate the store on its own, " he said.
Leasing: "Some institutions want to go the full leasing route," Duvall said. "It all depends on what is in the best interests of the institution, and we help them identify those interests."

"This array of options is new to the campus bookstore industry," Duvall said. "It used to be either sink or swim by self-operation or leasing," he said. "We felt the need for more than just those two options, but there was no network to work with the institution to show how they can do it themselves.

"There is a need for a new understanding in campus bookstore management that with the proper training, a bookstore can be run institutionally just as well as a leasing operation can run it," he said. "One of the biggest problems with bookstore operations is simply basic training for managers. They often have a lack of training in the operation of the business.  BMC offers a training center for bookstore personnel to help fill the training gap," Duvall said.

"The unique challenges of bookstore operations in higher education also must be considered when exploring ways to improve store operations," Duvall said. "There has to be a deeper understanding of the agendas of the university or college environment," he said.

Revenue Generator: "The traditional perception that the campus bookstore needn’t be operated at peak efficiency is a lingering concern, but one that is gradually being erased by the need for revenue," Duvall said. "With the fiscal situation on campuses today, officials are looking for as many revenue generators as they can find, " he said. "The historical thought was that you could either provide good service, or you can enjoy net revenues, but you can’t have both. The truth today is that if you provide the best possible service, that will provide revenue.

"Georgetown stepped into this management void after considering the lack of options facing campus bookstore," Duvall said.

"Georgetown got into this because we felt we had a particular expertise in campus bookstore operations," Duvall continued. "We have run good operations here, and in discussing it, we thought we could market that expertise and serve as a revenue-generator for the university."

"A lengthy planning period of about three years preceded the launching of Bookstore Management Concepts," Duvall said. "The planning period was crucial.

"Any institution interested in doing this has to have the true desire, the true dedication to make it work, just like any business," he said. "From the planning, the formation of the business plan, to insuring that all the issues are addressed, that takes a lot of work.

"An especially sensitive issue was the specter of unrelated business income tax," Duvall said. "We spent countless hours – well, I can’t say countless, since the attorneys kept precise records – but we spent a lot of time with the attorneys and a lot of time with our accounting firm, making sure that everything is fine in regard to unrelated business income. We made sure the structure is set up so we won’t have any trouble with that."

As business officers become more involved with bookstores as revenue generators, the need for experienced advice grows, Duvall said. "Most business officers do not come from a retail background," he noted. "Many of them don’t understand from the inside what it takes to run a successful entity that they can go to for objective answers to questions about the bookstore operations. The established leasing companies – the Follets and the Barnes and Nobles – have proven the need is there. We can help fill that need with a unique perspective on the campus bookstores operation."

--NACUBO Business Officer