SSMU to close Haven Books after losses of over $200,000

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After sustaining losses of over $200,000 over the past three years, the Students’ Society has decided to close Haven Books.

On the recommendation of then-Vice-President Finance and Operations Dave Sunstrum, SSMU purchased Haven Books – a consignment bookstore located on Aylmer Street just below Sherbrooke – from Kevin Bozzo for approximately $40,000, according to Vice-President Finance and Operations Jose Díaz, in March 2007.

The Haven Books franchise – originally named Raven Books, was founded in Ottawa in 2002. The bookstore was successful in Ottawa, prompting Bozzo to open a location in Montreal, which he sold to SSMU after sustaining over $95,000 in losses.

In its first year of operation under SSMU, Haven incurred a loss of $72,606. The bookstore lost $91,159 the following year and projected to lose around $65,000 this fiscal year.

The decision to close Haven was made in SSMU Council’s confidential session, after a recommendation from the Operations Committee that SSMU cease bookstore operations in April.

“The numbers showed that shutting Haven down was the most cost-effective solution,” said Díaz. “It wasn’t working, so it was time to let it go.”

The Haven property lease expires February 2011. If SSMU is unable to reach a settlement to terminate the lease, or to find a sublessor, it will be responsible for approximately $23,000 in rent after Haven closes in April.

Both Díaz and SSMU President Ivan Neilson referred to the initial decision to purchase Haven Books as a “mistake.”

“I think there wasn’t enough due diligence done [before purchasing Haven],” Neilson said. “When we were looking to purchase the bookstore we received recommendations from our auditors that it would not be a wise decision – that Haven was already hemorrhaging money when we were looking to buy it. But Sunstrum decided to go ahead and buy it anyway.”

Díaz outlined two main reasons for Haven’s financial difficulties: low traffic outside of add/drop period and restrictive McGill policies regarding on-campus advertising. SSMU’s Memorandum of Agreement with the university forbids the Society from engaging in any unauthorized business activities in competition with those provided by the university (with the exception of food services). Due to the existence of the McGill Bookstore, this restricted SSMU’s ability to both advertise and run Haven.

“We weren’t able to advertise Haven on campus with flyers or posters, or to sell coursepacks, because the administration saw Haven as competition for the McGill Bookstore,” Díaz said.

Benyamin Paris, the bookstore’s manager, acknowledged the difficulties Haven has faced but argued that the bookstore provides a valuable and cost-effective service to students.

“For every dollar that SSMU spends on Haven, the students save three to five dollars,” Paris said. “Because students both sell books and buy books at Haven, and because we have such a low commission rate, both transactions save students a lot of money.”

Paris suggested that some of the store’s problems could have been solved by raising the store’s commission rate from 20 per cent to 30 per cent of the sale of each consigned book. He also suggested that the decision to close Haven had political implications for SSMU.

“SSMU officials are negotiating for the rent of the Shatner Building [as the lease expires in 2011], and they didn’t want the political liability that they viewed Haven as,” Paris said. “Closing the bookstore makes things easier for them.”

Díaz plans to replace Haven with a book bazaar in the Shatner Building in the first few weeks of each semester. For a limited period of time, students will be able to buy and sell used textbooks, without the overhead costs associated with operating Haven throughout the year.

“A book bazaar could work, but I have my doubts that it will,” Paris said. “The organization is difficult, the payment system is complicated, and they used to do [a book swap] before they bought Haven and it wasn’t successful then.”