Has the Coop Met Its Match?

Barnes and Noble to Manage Harvard University Bookstore

Following an unusual year in the red, Harvard Cooperative Society President Jeremiah P. Murphy '73 announced early this month that Barnes and Noble will assume management of the Coop by June 1996.

Last year was the first time in recent memory the Coop suffered a loss--about $200,000, said William R. Dickson, chair of the Coop's board of directors.

And if the Coop had not brought Barnes and Noble on board, the 113-year-old general merchandise department store could have gone bankrupt, Dickson said.

"In the long term, the future of the Coop was shadowed somewhat," said Dickson, who has been on the board for more than 15 years. "It could've on bankrupt it would have happened in the next few years, but...."

The agreement with Barnes and Noble, a nation-wide book retailer, is for 15 years, according to Coop Director Larry Cheng '96. But Murphy said the Coop can exit the agreement at any time it is unhappy.

In an interview last week, Murphy, said that the Coop wanted to stay competition economy that is divided superstores and small .

For expertise, turned Barnes and Noble Bookstores Inc., the sister company of the publicly-traded Barnes and Noble Inc.

"They really do the business that we are interested in," Murphy said.

Barnes and Noble Bookstores operates 312 campus bookstores across the country and has been doing so for 27 years, according to Stan Frank, head of the company's college division.

Murphy said the Coop's department-store format has become obsolete. And as president, Murphy said he has been forced to reconsider the store's mission.

"We were rethinking what makes sense for the Coop in this day and age," Murphy said in an interview last week. "Our roots are in the academic community. We're going to have the best bookstore in the world."

Although plans for renovating the Coop's six stores are not final, the Harvard Square landmark will be more modern and customer-friendly, Murphy said.

On the first level the a small cafe. Prints, trade books, textbooks and in the store, Murphy said. Other items such as housewares may be stocked during peak periods.

Less popular items such as men's suits and women's wear will likely his eliminated.

Then Bahat cut to the chase: "Are we still going to get our rebate?" he asked.

Frank and Murphy said last week that Coop members like Bahat will again receive a percentage rebate on their purchases, which has not been given for the last three years because of a lack of profits.

"The Harvard Cooperative Society expects to begin to reinstitute rebates," he said. "The Coop will definitely make a profit and we hopefully will make a profit. It's definitely going to be a more advantageous situation for the Coop."

Another student shopping in housewares said that selling more books instead of clothes would not be a bad idea.

"I know very few, if any, of my friends go to the Coop and buy clothes, so I don't think that would be much of a loss," said Ethan C. Korngold '97.

But one student lamented the new management, ough the Coop's name will not change.

"The from Harvard in 1962. "The Coop is...a landmark of Harvard, and it's sort of upsetting."

Kaljuvee '97, who was shopping in the insignia department, said the will make the store .

While Kiljuvee may be better deals on said that Barnes and system is similar to the Coop's.

But he said the store will stock more used books from Barnes and Noble's textbook exchange, which is the largest such used book consortium in the country.

This network of used books is just one example of the economies of scale offered by contracting with Barnes and Noble, Murphy said.

"There are going to be a lot more (used texts)," said Frank, Barnes and Noble's college store division head. "We will be doing buy-back year round." Until now, the Coop has offered only limited buy-back periods.

Although selection in the trade and textbook sections of the Coop may improve, some booksellers said centralization of book purchasing could lead to fewer choices in the long run.

"When you have a concentration of decision-making and buying power in a few hands rather than many hands, it leads to an overall lack of diversity in what gets published," said Carole Horne, the head book buyer for Harvard Bookstore and the president of the New England Booksellers Association.

Murphy said he could not yet say whether the management takeover would result in layoffs, but said that he wanted to minimize firing and move employees between departments to preserve jobs.

Whatever the impact of increased centralization, Murphy's vision of building a world-class bookstore takes money.

Neither Frank nor Murphy would specify the exact nature of the agreement between the Coop and Barnes and Noble, Murphy said the Coop and the store manager will split profits on a percentage basis, but he would not say what that split will be.

Whatever the profit breakdown, Murphy said Barnes and Noble will acquire management of a $50 million dollar business with high prestige.

"There's a lot of hidden leverage in this thing," Murphy said, explaining that Barnes and Noble has an incentive to succeed at such high profile schools as Harvard and MIT, which also has a Coop store.

In recent years the company has taken over campus stores at Boston University and William and Mary.

"I think most people have been fairly satisfied and haven't noticed in a bad way that anything has changed," said a customer service representative at Boston University's bookstore, which was taken over by Barnes and Noble in 1994.

The Boston University store is currently undergoing major renovations, including the installation of a cafe, Frank said.

At William and Mary, Michael Hadley, editor of the Flat Hat student paper, said reactions to Barnes and Nobles' changes have been "fairly positive."

"The main floor is a lot more like what you would find in a private bookstore," he said of the renovated campus store.

Still, some have questioned the decision to have a company manage the store rather than revamp the Coop from within.

Garis Distelhorst, president of the National Association of College Stores, said he was confused by the Coop board's decision to contract out management of the store.

"Whether or not this move is good in our industry is open for debate," he said. "A school renowned for its business school can't run its own bookstore?" he asked.

Other campus stores, such as those at Cornell and Yale Universities, continue to operate under their own management.

The Yale Co-op has not given a rebate in the last three years, according to President Harry Berkowitz. But the Cornell store is expanding its book operation to an on-line catalogue, said Rich McDaniel, director of Cornell Business Services.

"We're University-owned and run as an enterprise department of the University," McDaniel said. "The pricing policy is to stay competitive."

Despite these criticisms, at least two members of the Coop's student board of directors have said they applaud the decision to hire Barnes and Noble.

"They're coming in and managing the store," explained Anton C. Pil, an MIT senior. "We get a percentage of sales and a fee from them to manage the stores."

Cheng, president of Harvard Student Agencies, agreed.

"Harvard Square is not the place to offer a general department store," he said. "It's an aggressive move and a strong move for the Coop."CrimsonAndrew L. WrightThe cafe at the Barnes and Noble Boston University bookstore sells Starbucks coffee, as may the new cafe on the first floor of the Coop.