Monday, September 22, 1997 Selling UCLA FINANCE: Lucrative
student store goes beyond textbooks to provide myriad services and
products to campus community
By Frances Lee
Daily Bruin Senior Staff
Beneath the arches on Ackerman Union, newly remodeled in Urban
Outfitters-esque trendiness and too noticeable to miss, lies the
ASUCLA’s cash cow.
Bright, gleaming and brand-spanking new, the unveiling of the
UCLA Store in January heralded the next generation of campus
stores; it is arguably the largest and most lucrative student store
in the country.
The UCLA Store goes beyond its most basic function of supplying
textbooks to the student population. Part mall, part office-supply
superstore, part mini-mart, the store is designed to serve all
needs, all the time.
This is definitely not your father’s student store. But he will
always be welcome.
Right now, however, the focus is not on fathers, the tourists,
or the faculty and staff, but on the 33,000 students who will flood
the campus this week.
The marketing campaign – "Welcome to UCLA" – is well under way
to pull in the students.
"If you’re new to campus, we want to introduce you to the
store," said Carol Anne Smart, chief operating officer and director
of retail operations for the UCLA Store. "If you’re returning, we
want to refresh your memory."
Smart and the association are optimistic, and the figures are
backing them up. Fiscal-year-end figures show the store to be
$400,000 over budget. Those figures were based on the store being
in its new location for six months.
It is no secret that the students’ association is banking
heavily on the store to help them meet their financial goals, since
about 70 percent of ASUCLA’s $80-million annual revenue is
generated by the store.
After all, it is "the heart, the core of the organization," said
ASUCLA chief financial officer Rich Delia. "It does close to $60
million in sales and it’s critical (for the association)."
But this heavy dependence on the store for $56 million of
revenue has some people wondering whether it is fiscally sound to
expect too much from the store.
"If the store only sold one product, yes," Delia said. "But it
has many products (and services) in it. It’s important not to put
all your eggs in one basket."
Since the store dabbles in computers, books, apparel, school
supplies and a mini-mart, Delia feels that the association has
spread its risk.
Then there are concerns that items in the store are overpriced.
Take, for instance, the sweatshirts. At about $60 each, an average
student may have to take out a loan just to buy one.
"One of the problems, especially for students, are that the
prices (for BearWear) are very high," noted Joe Chang, a third-year
atmospheric-sciences student and UCLA Store employee. "(The store)
would make a lot more money if prices were lower … (then) more
people would buy (BearWear)."
Despite the common perception among shoppers that things are too
expensive, Smart maintains that "prices are not inflated. There (is
so much outside) competition, there is no way the store could
operate with inflated prices."
As for "overpriced" BearWear apparel, Smart explained that
although UCLA buys one of the largest volumes of school-logo
clothing, "they are still small quantities (compared to major
retail operations). The designs are unique to UCLA and they are
made domestically."
Those factors combine to make them expensive to purchase and
expensive to sell – "not because we arbitrarily say we want the
most expensive sweatshirts," Smart said.
Although not the largest revenue-generating item, BearWear is
certainly one of the most important and profitable. Case in point:
When the men’s basketball team won the national championship in
1995, a buying frenzy ensued, bringing the association a $1-million
windfall. That windfall saved the association from realizing a
$1.5-million loss that year. Something similar happened the year
before, when UCLA made a Rose Bowl appearance for the Pacific 10
conference.
But national championships are about as reliable as the state
budget – no two years are the same and nothing is ever guaranteed.
Nevertheless, the association is "really optimistic," Delia said,
and they have "high hopes" for the store.
There is a store beyond the sweatshirts, and that is the store
that ASUCLA is banking on. ASUCLA is optimistic about the store
this fall, because this will be the first class to see the store in
its full glory – an entire class of freshmen and transfer students
who will undoubtedly feel the urge to buy UCLA paraphernalia.
Employees are busy preparing for the fall rush, when pockets are
lined with the first flush of financial-aid money, summer-job
money, graduation money – money that the association hopes will be
spent in the store.
The store is filled with "convenience, value and specific
products that fills new students’ needs," Smart said. It has to be,
she added: "Otherwise, they’d go elsewhere."
At times, the UCLA Store may seem like little more than a lean,
mean money-making machine.
But "the store is what enables the association to accomplish
what we’re here for, which is serving our mission," noted ASUCLA
Executive Director Patricia Eastman.
The store generates the income necessary to maintain the
facilities, provide services and fund various student programs
through contributions to the undergraduate and graduate student
governments, Eastman said.
So, without the store, the association as it is now would not
exist. And without the students to sustain their lifeblood, there
would be no store, which is why students are ASUCLA’s top priority,
stressed Eastman and Smart.
Graduate-board member James Friedman noted that the association
will "need to be constantly in touch (with student needs). The goal
is to provide more services to students."
The inevitable crush of students who will pour onto campus this
week will likely translate into long lines to buy textbooks.
But when they’re done, students can wander downstairs to buy a
sweatshirt to show off school pride, browse through the Calvin
Klein boutique, drop a few bucks at the Clinique counter, pick up a
bottle of water in the Market and read a magazine in the
BookZone.
Not just because they want to, but because they can.
Technology buffs will also take note of the wide array of
software titles and the academic pricing on both software and
computers.
The Computer Store is not the healthiest component of the store,
but, according to management, changes are being made to make it
more competitive with major chains such as the Good Guys or Best
Buy.
It was with the importance of the store’s financial health in
mind that ASUCLA took advantage of the Ackerman Union
seismic-retrofit project, begun three years ago, to expand and
remodel the UCLA Store.
The association spent more than $23 million on the project, with
a large chunk of that money going into the store. After endless
delays and construction-cost overruns, the association opened it in
January, crossing its fingers and holding its breath in
anticipation of what the new store would do for it.
If anything, noted Friedman of the graduate students’ board,
"it’s going to be a tremendous relief for students" to finally have
a store that isn’t going to change locations in the middle of the
year.
Although it is still too soon to tell whether the investment was
worth it, efforts are concentrated on making sure the momentum
continues.
In high-level powwows, the top executives have been strategizing
on bringing in the students, bringing in the staff and faculty,
bringing in the tourists – in short, bringing in the money.
Some are concerned that, since UCLA is a closed community with a
stable population, the store might be bigger than necessary.
"There is a lot of growth potential (in the store)," Delia said.
"I don’t see (revenue) maxing out for a number of years.
"There is somewhat of a concern … (because) the population (at
UCLA) has been stable for a long time, and (the university) is not
forecasting a large influx of students. We’re kind of limited, but
there are other opportunities."
"Other opportunities" include aggressively courting the tourism
industry, working with other universities to provide textbook
services, expanding the fledgling on-line UCLA Store and focusing
on bringing in sales through outside events.
This focus on increasing revenue "lends itself to the perception
that all we’re interested in is making money," Friedman said.
"There’s truth to that, but at the same time, we’re trying to
respond to existing consumption needs."
And, he added, "we take the revenue and give it back to the
campus," although Friedman conceded it will be a challenge for the
association to show that to students. THE PLAYERS PATRICIA
EASTMANASUCLA executive directorASUCLA chief executive officer
Prior to joining the board of directors in August 1996, Eastman
spent 16 years as a hospital administrator. Under her leadership,
ASUCLA implemented a financial turnaround plan, opened the new UCLA
Store and increased the student union fee. THE PLAYERS CAROL ANNE
SMARTUCLA Store chief operating officerUCLA Store director of
retail operations With more than 20 years of retail experience,
Smart joined ASUCLA in September 1995. She oversaw the remodeling
and expansion of Ackerman Union and the student store, and the
grand opening of the new UCLA Store in January 1997.