SF State bookstore makes shift for profit after 58 years
The University will maintain ownership of the Bookstore while Follett is used as a contractor for management. Every year a percentage of the total revenue will be paid by Follett back into SF State. There is no fixed percentage.
“It takes the risk away from the University,” said Agnes Wong-Nickerson, associate vice president of fiscal affairs at SF State. “It doesn’t matter what the expenses are, we still get a share based on the sales number.”
This contract also includes a minimum guarantee clause. According to Wong-Nickerson, who also works as UCorp chief operating and financial officer, estimates around a $700,000 share after expenses are taken out for the first year of partnership. This formula creates a steady stream of revenue for the school.
Follett will also contribute $10,000 to a scholarship fund every year, allowing SF State to decide how to distribute and award the scholarships. Details about where the money will go have not yet been worked out, according Wong-Nickerson.
Speculation about outside management returned June 2011, when the now defunct Franciscan Shops learned about the request for proposals issued by UCorp. Follett announced this new partnership in June and officially began management July 1. Follett operates bookstores on 10 other CSU campuses and more than 930 nationwide.
The budget crisis and economy played a role in the decision to bring in outside management, said Robert Strong, general manager of the Bookstore, who has been with Franciscan Shops since the ’70s.
“The University is starving for cash. The budget crisis is looming and it affects every corner of the campus,” Strong said. “So the University has been turning over every rock looking for every possible opportunity for revenue to supplement the shortages in the general fund which is what pays for the salaries for the teachers that teach the classes.”
The way the marketplace is now would not allow a drastic raise in textbook prices, according to Strong. This new contract would not allow Follett to go outside of its profit margin and start raising prices.
“Textbooks increase in price every year,” Strong said. “You might be looking at the textbooks this fall, and look at it a year ago and say ‘Hey, how come Follett is charging more?’ Well, textbooks on average for the last 2o years have exceeded inflation.”
Pam Parsons, the store manager at Sacramento State University, which is also managed by Follett, said that her university has held to its contract agreement and has not tried to price its textbooks based on any other criteria.
“We’ve seen Follett consistently search for programs that will add value and savings to our student bookstore,” Parsons said. “For instance, it has been with Follett that we’ve been able to introduce alternative text options like e-books and text rentals to our schools.”
Follett recently launched a new program called includED, which offers textbooks with tuition or a single fee. Students can opt into this program and pay a fee of $280 for all course materials.
“According to the CalPIRG and Greenlining Institute, both of these nonprofit institutions have been publishing figures like textbooks cost an average between $550 and $700 a semester. On the face of it, the $280 looks like a good deal. This is very preliminary because it is a small sample, but keep in mind this is before a lot of students are going to add classes later,” Strong said.
David Hellman, who was a chosen representative for Franciscan Shops, has been a longtime advocate against outside companies taking over management and is passionate about independent bookstores.He does not feel this program pays off.
“If you think about it, there’s a lot of students in liberal studies and they don’t necessarily pay $280 a semester for books. It’s not going to benefit them,” Hellman said.
As of today, the program is only available for incoming freshman, with hopes of it being offered to other class standings in the spring.
“Being an independent store, you hear all these stories and accounts where Follett or Barnes & Noble took over a store and there was this mythology about how they let everybody go and jacked up the prices; none of that has happened here,” Strong said.
Strong has been the general manager since 1983 and has said that the new management has not negatively affected him.
“We’re all doing the same thing we did before,” said Strong. “We have different policies but the bottom line for the business is we want to cover our expenses and Follett wants to make a profit that will keep the company running, but you can’t do that unless your number one focus is on the customer and delivering excellent service and that hasn’t changed. Follett breathes these values.”
Hellman does not share the same optimism that Strong has. He found it curious that a decision regarding something as important as the Bookstore was not left up to incoming University President Leslie E. Wong.
“It would be very interesting to ask President Wong what his opinion might be,” Hellman said. “A nonprofit really represents what this city and campus are about. It behooved me why they would bring someone from outside to run an operation which had been run successfully for more than 50 years.”
Hellman also said that the Gator Rewards program is going to disappear. The Gator Rewards Club enabled students to earn $25 gift cards to the Bookstore, Healthy U and Lobby Shop after spending $350 on items in the store.
“The motivation at Franciscan shops was not to make a lot of money — that’s Follet’s,” Hellman said. “To call it a bookstore is an insult to those who truly love books.”
Ken White, who ran the trade department of the Bookstore resigned and left because he felt it was not a bookstore anymore, according to Hellman. The trade department was also reduced, which decreased the number of non-textbooks available for purchase. White declined to comment for this story.
Kristina Gonzalez, a recent SF State graduate who has been working at the bookstore for seven months, said she’s noticed more women’s apparel and backpacks being sold.
Parsons also said that certain bookstore departments have grown in the time since Follett took over.
“As time went on and sales histories were created, our departments did change,” Parsons said. “The most noticeable difference is in our computer department, which was a small counter when we were campus operated, and is now a large Apple Store that encompasses about 800 square feet.”
Strong hopes that students will at least take the time to a check out their new operation and not allow the negative stigma of a corporation dictate their decision.