Varsity Group, which began operations in 1998 as Varsity Books, turned its first annual profit in 2002, recording net income of $661,000 on revenue of $16.6 million. In 2001, Varsity had a net loss of $2.2 million on sales of $12.5 million.
The company, which as recently as 2000 posted a loss of $34.8 million and still has an accumulated deficit of $69.8 million, began to turn its fortunes around in 2001. It abandoned its efforts to sell textbooks online to college students and focused on operating as an online bookstore for private high schools and small colleges. Through its eduPartners service, Varsity operated online stores at 130 schools at the end of 2002, compared to 90 in the prior year.
Eric Kuhn, Varsity's CEO, said he expects the eduPartners program to continue to grow in 2003. To date, the majority of Varsity's contracts are with private high schools, but the company hopes to add more small colleges and distance learning institutions this year. Since the end of 2002, Varsity has added 30 new schools to eduPartners, and in another sign of growth it expanded its staff to 25 from 20 one year ago. To help expand its business, Varsity is prepared to spend more money on sales and marketing and advertising, but the company said it has enough cash on hand to fund its growth initiatives for all of 2003.