Howard University

Washington,

Bookstore Financial Analysis And Proposal Review

In 2010 Howard University engaged B&ID to assess whether the university should lease its bookstore operation to a third-party manager and move the store into a new location near campus. A major bookstore management company had submitted a proposal for management and the university wanted B&D to determine if the terms and conditions proposed were appropriate. Our evaluation process consisted of: a review of all bookstore financials and sales information; development of a five-year pro forma of the store in its current location and a new location; an analysis of the proposed operating agreement; and a review of the proposed new store’s design. We made specific observations about the proposed agreement, including information on commission return, investments, inventory buyout, operating policies, and pricing strategies. Our analyses were specified so that the university understood what the management company must provide financially to make the leasing agreement feasible. Finally, we outlined next steps and store transition issues to consider should the university decide to move forward with outsourcing its bookstore.