Stanford bookstore has survived as an independent nonprofit company for 102 years by nimbly keeping up with the times. Once a simple outlet for textbooks and notepaper, the store these days is a full-service emporium where customers can sip a latte, pick up a New York Times best-seller and buy everything from a computer to Clinique cosmetics.
But the Internet age probably means the end of its independence. Prompted in part by competition from online booksellers, the store's board of directors is considering bids from outside companies, such as Barnes & Noble, to take over the operation of the Bookstore's six locations.
"Nobody takes any joy in this," says David Kennedy, '63, a history professor who chairs the board. "But, boy, the times they are a-changing."
Sales of trade books -- that is, non-textbooks -- are off by 12 percent this year, a decline that Peggy Mendelson, president and CEO of the store, attributes to competition from online booksellers such as Amazon.com and Barnesandnoble.com.
That -- plus a 35 percent drop in computer hardware sales over the last three years -- is eating into the Bookstore's $40 million in annual revenues. And textbook sales might be the next to suffer. Online competitors, including VarsityBooks.com and BigWords.com, offer prices so low that a national college bookstore trade group is investigating to see if publishers are providing an illegal discount to Internet sellers.
Early this year, the Bookstore board started discussing the possibility of leasing the store to an outside firm. Nearly 30 percent of college bookstores, including those at Harvard, Yale and Berkeley, are already run by private companies. The reason: big outside firms can spread overhead expenses over lots of stores and return a tidy profit to the university, typically about 10 percent of sales.
One issue that hasn't been decided: will the nonprofit continue to exist or will the University, which holds the lease, assume control and then hire a third-party operator. The Bookstore's 10-year lease with the University expires in February. Meanwhile, bids were expected from interested companies by late April. A decision should be made by June.
