Following significant financial losses, the board of the National Association of College Stores asked for the resignation of CEO Bob Walton and unanimously elected NACS COO Ed Schlichenmayer, who has been with the association for 19 years, to succeed him. “Ed’s appointment allows us a seamless transition,” said board president Chad Schreier, CEO of MSU Bookstore at Montana State University in Bozeman. Schreier made the announcement about the transition in leadership on July 24 at the association’s first annual membership meeting held via webinar.
The appointment is just one of the changes that have been set in motion as a result of the association’s $5 million decline in investments and its year-over-year drop in revenue. For the fiscal year ending March 31, total revenue went from $54.8 million in 2018 to $52,.4,million in 2019. Total assets were down even more, from $32.7 million in 2018 to $24.0 million in 2019. In addition to paying down long-term debt, NACS saw a $2.4 million loss from its indiCo Books textbook distribution program and a $1.9 million loss from its failed expansion of indiCo’s general merchandise program. Its PartnerShip shipping program, which is used by a number of bookstores, not just college stores, and Camex each saw a $1 million loss.
“indiCo took the most risks and here you’ll see the most changes,” Schreier said. As a result, NACS is planning to exit the textbook distribution business under indiCo Books. In response to a member question, Schlichenmayer said that the association had not yet decided whether it would also stop selling trade books. The association will work with Ingram Content Group over the next few months to develop plans to assist campus stores
NACS is also winding down its general merchandise program, which it began to try to give independent stores the same advantages as corporate chains. But it will keep open its China office for at least another six months. The association has not yet reached a decision on whether it will keep some of its other related programs such as providing parcel lockers, fixtures, loss prevention supplies, and group or special buys.
Another indiCo program in which NACS contracted with campuses to bring back independent stores, is being reworked. Moving forward NACS will no longer contract for management services and it will wind down the three stores it currently works with to transition them back to independent stores.
Many of these programs were introduced or expanded under Walton, who became CEO in July 2016, when the association’s NASCORP subsidiary lost its largest customer, Follett, and with it $30 million in business. Follett switched its distribution to Baker & Taylor, which it had acquired earlier that year.
“The greatest risk we faced four years ago was doing nothing,” said Schreier, who expressed confidence in the transition in programs and leadership. The new plan includes keeping at least one innovation begun under Walton’s watch, Resero, a cloud-based retail technology built from Sidewalk software, which the association acquired when Sidewalk closed last year. According to Schreier, there is a clear path forward for Resero to be profitable.
Other changes set to take place involve relocating PartnerShip to NACS headquarters in Oberlin, Ohio, and adding salespeople as part of a diversification plan. Camex, too, is being revisited and will focus on the educational needs of its members. The organization is also working to repair damage done to its vendor relationships through some of its indiCo operations with an eye toward bringing more suppliers back to Camex.
As a result of these changes, Schlichenmayer anticipates laying off 10 to 12 people in the next six months. Eleven positions were eliminated in the past year through a combination of layoffs and attrition.
