College bails out bookstore with $40,000 loan

Julie Hillman

At about the same time Oberlin students began thinking about their return to Oberlin, the Co-op bookstore began wondering how they would be able to fill the insatiable appetite those students have for books. The Co-op bookstore is in financial trouble. This summer, the college extended a $40,000 loan to the Co-op allowing them to purchase textboods for classes.

Vice president of Finance, Andy Evans said the college made a one time small loan to the Co-op that will be paid back this fall. The loan was "to ensure that textbooks would be available to students," Evans said.

"Given their financial situation, they had pretty much exhausted any other source of income or credit," Evans said. "Their publishers would not ship unless they had a quick infusion of cash."

Most of the Co-op's financial problems stem from the contruction of its new building location in 1992. The new building has one-third more space. The extra merchandise has failed to sell and has only contributed to the accumulating debt.

The College believes the Co-op is a valuable asset to the college. "We want the relations between the College and the Co-op to remain very healthy," President of the College Nancy Dye said.

At first Evans did not support the idea, but "if the books weren't here it would be a lot worse," he said.

Co-op Administrator Steve Rugare said the College rejected a plan to put in a Barnes and Noble bookstore a few years ago in favor of keeping the Co-op even though the chain bookstore offered a lucrative package to the college.

According to the Cooperator, the Co-op newsletter, the Co-op shares basic assumptions about work and ownership with OSCA. All income is reinvested in the business because the Co-op is a nonprofit organization. Decisions are made democratically by a board elected by the Co-op's members.

"The Co-op does not intend to take out another loan from the college," Rugare said.

"The Co-op believes that the cash flow will be there in the spring," Evans said. "Our goal is to be supporting of the Co-op and we would like to be supportive. It is also important that they be financially solvent," Evans said.

"Our move into bulk and packaged foods is the opportunity to provide our members and owners with one of life's necessities at a fair price and in a form that is toxic neither to them nor to the environment," Co-op Board President Alison Gould said in her newsletter column.

The Co-op has added a new cafe and has begun selling natural foods. It also attempted a bag check system, but that is ending due to the lack of appreciable difference in theft and the general ill feeling towards the system.

Co-op managers said shoplifting at the Co-op is a factor contributing to the financial troubles. Rugare reported a yearly loss of $70,000 to $80,000 due to shoplifting. "In a way, shoplifting is a cost of doing business," he said.

Regardless of the shoplifting problem, most of the problem stems from the construction of the new building in 1993 and the fact that true growth has not reached the projected growth assumed by the 1992 business plan, according to Rugare. The Co-op secured a loan from the bank using these projected figures, but now the payback schedule is unsupportable and the board will have to re-finance the mortgage on the building.

The demolition and construction of the new building cost approximately $2 million.

Some students feel they are being gouged on the textbooks and that the lack of competition allows the price to stay higher than usual.

Sophomore Martha Schoppe said, "I think they are overpriced this year because for three classes it cost over $300 and usually it's $300 for the whole semester."

Other students wish there were more used books. "For me it's really expensive. I just bought the books for one class, and it was $70," first-year Laura Barbieri said.

According to Rugare the store tries to be fair, but it costs an enormous amount of money to buy textbooks and the Co-op has to make that investment back to stay in business.

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Copyright © 1997, The Oberlin Review.
Volume 126, Number 1, September 5, 1997

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