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Indie Bookstores Want to Kick Corporate Chains Off Campus

A trade group has a new plan to keep college bookstores independent.

The ranks of independent bookstores in the U.S. have grown steadily over the past decade, as small shop owners regained their footing in a publishing industry transformed by the rise (and fall) of the big-box stores and the emergence of Amazon. Now the indie movement is heading back to school.

The National Association of College Stores (NACS) announced the launch of a consortium of university-owned stores on March 4 during an industry conference. The goal is to push the two corporate giants in college bookstores, Follett Corp. and Barnes & Noble Education Inc., off campus. The group would pool buying power and management expertise in a bid to boost profits and lower costs for students.

“Every five years, $1 billion in profit that used to stay in higher education is now going to private companies,” said Robert Walton, chief executive officer of NACS.

A spokeswoman for Barnes & Noble Education, which operates 770 campus stores and spun out of the big-box bookseller in 2015, declined to comment. Follett, which manages 1,200 campus stores, didn't respond to an email seeking comment.

Walton has argued that the campus bookstore has failed to adapt to the modern marketplace. In the 1980s, when colleges began to outsource store management, leasing out a campus bookstore in return for a share of profits allowed university administrators to eliminate day-to-day headaches, like hiring staff and managing inventory. The ability of these corporate stores to negotiate better deals with publishers and other vendors often meant more profits, and leasing revenue gave schools extra money to spend on core functions.

Now the corporations take "too much money out of the system” in profits, Walton said. But the same technology that upended the book business in the past may help an independent bookstore compete with its larger rivals. Better software has also made running a retail business easier, Walton said, decreasing the need for universities to rely on private-sector partners.

Walton’s solution is a two-pronged plan to take stores back from the corporate chains. Schools that want to operate their own stores can pay for a la carte services, including software, store design, wholesale pricing on textbooks, and deals with e-book companies. Schools can also outsource store management to the NACS consortium, much in the way that they would lease a store to a corporate chain.

Attracting members to the new consortium will be a tall order. About 90 university-owned stores turn operations over to big chains every year. To reverse the trend, the NACS consortium will have to convince administrators that it can manage a business that's becoming increasingly competitive. 

"I think the outsourcing trend is going to continue," said Greg Pendy, an analyst at Sidoti & Co. who has a neutral recommendation on Barnes & Noble Education. Pendy added that the chain bookseller recently extended a price matching program at all of its campus stores in an effort to keep up with online sellers, and that large chains are likely to benefit as the textbook business becomes more complicated. 

Walton conceded that the NACS consortium is the underdog, but argued that NACS can offer an appealing alternative to cookie cutter chains. "We want to give schools a lot more control, and a lot more choice," he said.

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