University of Iowa bookstore changes strip alternative book vendors from website

IOWA CITY — Days before the University of Iowa enters a new public-private partnership for its University Bookstore and Hawk Shop, it’s alerting faculty and staff — using all capital letters, in one communication — that “starting now, all textbook orders are required to be placed with the UI-owned Iowa Hawk Shop.”

Faculty and instructors previously could list privately owned Iowa City stores like Iowa Book and Prairie Lights as options to buy textbooks on MyUI — the web-based portal where UI students can find class websites, view grades, pay bills and access records.

Now, only the Iowa Hawk Shop, the UI College of Law Bookstore and ICON Direct can be listed on the website as options for textbook availability — and must be, according to UI Associate Dean and Executive Director of the Iowa Memorial Union Bill Nelson.

“It has been the university’s goal for the Iowa Hawk Shop and University Book Store to be the primary source for course material listings,” Nelson told The Gazette via email in response to questions about the changes and about a communication this week advising and instructing employees on them.

Not being listed as options on a key website used by students is seen by some private bookstores as yet another hurdle to their financial success — this one posed by a public entity, not Amazon.

Although students may continue buying textbooks from any vendor they choose, Iowa Book’s longtime textbook manager Virgil “Scooter” Hare said he thinks his store might lose some business from first-year students unfamiliar with their options.

“They would probably just see the Hawk Shop and only think that the books are available there,” Hare said. “So it kind of gives a one-sided element. I would call it almost monopolistic.”

Next Thursday, the university will hand over operation of its Hawk Shop and University Bookstore — housed on the ground floor of the student union — to Follett Higher Education Group, an Illinois-based company.

UI months ago issued a call for potential partners after years of financial losses from the stores. While gross revenue has averaged about $11 million for the Hawk Shop and bookstore since 2015, according to UI documents, average net losses have topped $100,000 a year during that period — not including costs of personnel and marketing.

The new deal with Follett pays the UI 16 percent of gross sales up to $10 million; 17 percent of any part of gross sales between $10 and $12 million; and 18 percent of any part of gross sales topping $12 million, according to the contract. The private operator also must pay the UI 8 percent of gross sales on digital course materials.

If during the first full year UI royalty payments fall below $1.125 million, Follett must pay the balance of that amount to the university, according to the contract, which also requires the operator to pay the UI $250,000 for every five-year operating term; $100,000 annually for utilities; $50,000 annually to support student life programs; and $10,000 for UI library programs.

The agreement requires Follett to spend $1 million to improve the bookstore space and invest $110,000 on point-of-sale and store management systems. The university in the fall told The Gazette its Hawk Shop had 17 full-time staff, about 110 part-time student workers and six temporary employees.

While the UI hasn’t been charging sales tax at its shops through an “educational exemption” for state institutions — giving it an edge over private sellers that can’t pass on such savings to customers — the deal with Follett changes that.

UI officials have said its contractor will be “obligated to collect and remit state and local sales taxes,” and vendors like Iowa Book believe that could help level the playing field.

Despite changes in what can go on the MyUI website, individual professors and instructors still can mention Iowa Book or Prairie Lights as options in syllabus materials.

“But, you are still required to also inform the Hawk Shop of your order,” according to internal communication to faculty and staff, adding, “You will no longer see Iowa Book or Prairie Lights displayed on MyUI in the textbook area.”

While Iowa Book’s Hare is not worried about the store’s survival — given its rich history in Iowa City, prime location downtown and that book revenue today accounts for a quarter to a third of its revenue — Hare said he’s heard from some UI instructors who are upset about the changes.

“Being a corporate entity, running a store at the University of Iowa — which should be a public university — it really kind of flies in the whole face of the academic freedom element that's often standard here that allows the instructor to choose whatever they want to teach in their class and how that’s disseminated,” Hare said.

Prairie Lights co-owner Jan Weissmiller said her store will have to be more proactive in connecting with instructors on course material options at the downtown business — which never has carried many text books.

“Prairie Lights best serves the students that come here for literature and writing,” she said.

Like other booksellers nationally, Prairie Lights has faced pressure from the influx of digital alternatives and giants like Amazon.

“We still have more books than most bookstores in the country,” Weissmiller said. “The way that bookstores have been surviving in these last difficult years with Amazon and everything is to carry a lot of other stuff. Prairie Lights hasn’t wanted to do that. We’ve wanted to maintain a store that's just got a lot of books.”

Understanding the UI is trying to survive financially like everyone else, Weissmiller conceded it must make business-driven decisions and Prairie Lights will keep leaning on its deep-seated relationships.

“The people that have been ordering from us for years were very concerned about this letter,” she said, noting they pretty quickly understood they still can use Prairie Lights and will. “But they were concerned about Prairie Lights suffering. So they’re aware.”

Comments: (319) 339-3158; vanessa.miller@thegazette.com