May 10 – May 17, 2007 Edition

B&N to Take Over

Indiana University’s

16 Campus Bookstores

5/10/07–Barnes & Noble College Booksellers, a privately held sister company to Barnes & Noble Inc., which operates more than 600 campus bookstores in 44 states, is taking over management of 16 bookstores on seven campuses of the Indiana University South Bend.

B&N will pay $5.5 million to the University now and another $2 million eight years later to manage the bookstores, according to items in the South Bend (Ind.) Tribune and Bloomington (Ind.) Herald Times on May 5. The world’s largest bookseller has promised to generate $850,000 per year for the school. Under the ten-year agreement, B&N will reimburse Indiana University for capital improvements, equipment and inventory. The company will also open a new $1.4 million Varsity Shop on the South Bend campus. A financial analysis compiled by the task force showed that Barnes & Noble operations would generate about $70 million in revenue for IU over 10 years.

The official take-over will happen on July 1. Under the agreement, the three full-time bookstore employees will be offered jobs at the same pay and benefits as they had received from the University.

Indiana University President Adam W. Herbert acted on followed a recommendation from a task force of administrators, business professors, and students. However, not all were happy about the outsourcing. More than 6000 people signed a petition to protest the move and some trustees were worried that outsourcing would undermine staff loyalty and service.

Officials said the agreement prevents price gouging — Barnes & Noble agreed to stick with current profit margins on textbooks.

Presumably, the Indiana stores will join the Barnes & Noble College Marketing Network, a division of Barnes & Noble College Booksellers, reaching more than 4.3 million college students in-store, on campus and online with well-targeted marketing programs.

President Herbert said he understands the emotional aspects of having BN take over the campus stores, and said the decision was not made lightly.