Board of Governors, June 28, 2000 - APPENDIX II, Annex 5-C


The Book Store proposes to build a 12,000 square foot addition at grade level. The addition would be linked to the present store by elevator and stairwell. It would be retail space. About 2000 square feet would be used by Food Services for a café; about 500 square feet would be common space. The balance would be expanded selling space for an expanded section of general and trade books and appropriate selling space for general merchandise (clothing, giftware, miscellaneous product). The present store area would then provide adequate space for computer product, textbooks, school and office supplies as well as expanded office and shipping space. We would relinquish the present computer store and Lambton Hall space. The net space gain for the Book Store would be 7500 square feet.

The construction, fixturing and additional operating costs would be self-financed.

The expansion will address the long-standing inadequacies of our space, allow us to serve the projected increased enrollment and continue to support, financially, the operating budget of the university.

1. Book Store Profile

With retail sales of $17,900,000 and selling space of 13,000 square feet, the UWO Book Store has the highest sales per square foot of any large Canadian or U.S. university book store.

In the year ending April 30, 2000, the Book Store:

2. Sales History

The Book Store sells three broad product categories: books, computer products, and general merchandise (school and office supplies, crested apparel and gifts, miscellaneous).

97-98 98-99 99-00
Course Books 9023.5 9476.5 10723.7
Non-course Books 1003.2 1032.5 1000.0
Computer Product 4320.3 4466.8 4173.2
General Merchandise 2085.9 1874.7 2016.7
Total 16432.9 16850.5 17913.6

3. Benchmarks

The Book Store is a member of the National Association of College Stores (NACS) and a sub-set of NACS called the Large Store Group (LSG). The LSG is a group of 67 of the largest university stores in the U.S. and Canada. The stores openly share financial statements to facilitate benchmarking. Here are some relevant comparisons:

Sales LSG Median UWO Actual UWO Rank (of 67)
Sales $ 13825.9 $17914.1 22
Sales per Sq. Ft. 727.0 1365.0 1
Course Book Sales 7836.2 10718.1 11
Custom Publishing 378.4 1555.0 2
Non-Course Books 1023.9 1000.0 34
Computer Sales 2087.5 4173.2 16
Supplies 970.7 550.0 61
Crested Goods 1252.9 1170.5 37
Other Goods 745.0 296.3 54


Expenses LSG Median UWO Actual UWO Rank (of 67)
Total Operating Exp. 23.6% of sales 17.9% of sales 6
Gross Margin 26.4% 20.1% 58
Inventory Turns 3.8% 4.7% 15

4. Analysis

Textbooks (including custom published) sales represent 60% of our sales but generate only 50% of our margins. Conversely, General Merchandise (11% of our sales) generates 23% of our gross margins. As text sales grow, we lose selling space for higher margin General Merchandise and non-course books.

Higher dollar sales per square foot are good, to a point. At $1365 per square foot, our sales are double that of the LSG median, four times the $300 ratio for Chapters or Barnes and Noble. Extraordinarily high ratios signal overcrowding, unpleasant and potentially dangerous shopping experiences and lost sales opportunities. That's our position now.

In the most basic terms, each student buys about 35 lbs. of texts. We can merchandise about 85 lbs. of books per square foot it we use pallets as opposed to shelves. A thousand more students translates into 400 more square feet diverted from higher margin product.

Safety and accessibility standards call for minimum 4' aisles and palletized books stacked no more than 48" high. Many of our text aisles are less than 3' wide and we palletize books to a 6' height.

In 1990, we stocked 40,000 titles of non-course books. Because of space constraints, we stock 25,000 titles despite a decade long explosion in publishing. We have obvious weaknesses in sciences, engineering, business and health sciences. This lack of depth is a constant frustration for faculty and grad students.

5. Conclusion

The Book Store is a business that serves the need of the university community. Its physical facility is too small. To support the planned growth of enrollment and to continue to contribute to the operating budget, the Book Store must expand. The Book Store is in sound financial condition and can support the cost of the expansion. A proforma is attached.

We would ask that the expansion proposal be approved so that the project could be complete for the start of the 01-02 school year.

The Cash Flow Model Assumptions (pages 3 and 4 of Annex 5-C) are not available in electronic form for the Web.