The Seminary Co-Op Bookstore on Chicago’s South Side sent an e-mail to its 61,000 members last week, informing them that the bookstore – which includes nearby 57th Street Books -- will implement changes to its co-op membership model in a continuing effort to improve efficiencies, and thus the bottom line, without sacrificing too much of the essence of the bookstore’s fabled quirky culture.
According to the letter, from Seminary Co-op director Jeff Deutsch, the bookstore is changing its member-shareholder program into a two-tiered structure that will streamline governance by separating it from membership benefits. In the future, to become a shareholder in the Seminary Co-op and to have a voice in its governance, members – who used to pay a fee to receive a 10% discount on their purchases –will have to purchase stock in the Co-op; membership itself is free.
Under the current system, Deutsch noted, members are considered shareholders with voting rights, but only .5% of members attend the annual meetings. “We have valid e-mail addresses for only 15% of our membership, making it almost impossible” to discuss, much less “receive majority approval on any initiative,” he pointed out, including a conversation on whether or not to vote on re-incorporating the Seminary Co-op as a nonprofit, which would require more than 40,000 votes under the current by-laws.
“We believe in the Co-op, we want a co-op, but we want it to be a functional co-op,” Deutsch told PW , noting that there are people on the Co-op’s membership rolls who haven’t made a purchase in years, “That’s what it all boils down to: figuring out a way to have a functional co-op.”
The Seminary Co-op, which last year celebrated the 55th anniversary of its founding near the University of Chicago campus, at one time included three bookstores and reported up to $10 million in sales. In recent years, sales have dropped to $3 million for the two remaining Co-op stores. This has resulted in an ongoing operating deficit, which currently stands at $205,000, down 18% from the previous year's deficit. Disclosing that the latest sales figures mark the first signs of growth in a decade, the Seminary Co-op reported in last Tuesday’s letter that sales were up 5.3% for the fiscal year ending June 30, 2016 and are up 4% to date, halfway through the current fiscal year. The Seminary Co-op generated $1.8 million in sales in FY2016, and 57th Street Books generated $1.1 million.
Deutsch attributed more than 40% of the rise in sales this past year to the store’s “galvanizing the membership base” with a late-spring appeal to them to shop at the store, supplemented by a month-to-month rewards program that expired at the end of last June.
But the store has also made changes to its business model that have pushed up sales. It has scheduled significantly more author events this past year (348 events in FY2016 vs. 188 in FY2015), and has committed to partnering with local cultural organizations in its programming, resulting in new customers. It is also selling more used books adopted in courses at the nearby University of Chicago and is stocking them earlier. And the 57th Street location, which is less scholarly in terms of its offerings and store vibe, has both increased its inventory of children’s books and expanded the children’s area of the store.
Deutsch ascribed much of the store’s continuing operating deficit to its philosophy of ordering books for its inventory of 100,000 titles on merit rather than on commercial appeal, thus “[privileging] the love of learning over the bottom line.”
“On any given day, we sell anywhere from 200-1,000 books,” he noted, “Of those, up to 75% are single copies of books. Some we sell just once a month, once a quarter, once a year, or once every other year. This means that, from a purely profit-driven perspective, we stock books we ‘shouldn’t.’” He acknowledged that could operate streamline its business, but said “[Implementing] a model of efficiency at the expense of thoughtful curation is the antithesis of everything we believe about the profession of bookselling.”
“In bookselling, a modicum of inefficiency is in order. This doesn’t mean that we want to be inefficient in the wrong ways, or for the wrong reasons. We want to run this ‘foolish’ business with intelligence and savvy.”
An earlier edition of this story stated that there is a membership fee at the Seminary Co-Op. Membership in the Co-Op is now free; the story has been corrected.