The University of Melbourne will abandon control of its 80-year-old bookshop and put it out to tender next year amid a torrent of red ink flowing through Australia’s stricken bookselling industry.

An email sent to staff this week by University Senior Vice Principal Ian Marshman — obtained by Crikey — delivered the bad news following a review of options conducted by an unnamed external consultant.

About 50 bookshop employees are believed to be affected by the change.

One staff member informed Crikey they were told their job was in the gun via a managerial PowerPoint presentation riddled with grammatical errors.

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In his email, Marshman blamed competition from online retailing and a cut-price bookshop on the Parkville campus’s fringe for the decision, following two years of fiscal losses. Options included taking no action, investing in new technology, selling to a specialist bookstore or shutting down completely.

A specialist private operator could deliver “efficiencies” to cut costs while retaining a physical presence on campus, he said.

“Although it remains to be market-tested, the University has received advice that a specialist retailer would deliver efficiencies in recruiting, purchasing, training and accounts and could provide an increased opportunity for new technology and modes of delivery (such as e-books, online content etc.) to enhance the range of services for University customers.”

National Tertiary Education Union branch president Ted Clark questioned the rationale behind the decision, telling Crikey “we’re not happy we don’t think that the bookshop needs to close”.

“To me it seems strange that they don’t want to own a bookshop, and it seems strange that the University would want to contract it out,” he said. “Still, they’ve got to consult with staff, they can’t just go and sack people by PowerPoint.”

He said members were currently talking with Bookshop management as part of a “consultation” clause embedded in their collective agreement, and at this point, redundancies and dismissals were uncertain.

For decades the Bookshop was an arm of Melbourne University Publishing housed in a building/rabbit warren directly opposite the student union. Six years ago it became a non-academic department of the university and shifted to gleaming new premises adjacent to the Baillieu Library.

Prospective contenders to run the shop include a firm called the University Co-operative Bookshop Limited, which controls around 55% of Australia’s campus bookshops and according to insiders would be expected to enter a bid.

The planned tender — due in the first half of 2012 —  caps a dire year for the book industry following the collapse in February of ailing retailer RedGroup, the former owners of Angus & Robertson and Borders.

The full Marshman email:

Colleagues,

I write to inform you of developments concerning the Melbourne University Bookshop.

In recent years the Bookshop has been operating on reduced revenue, reflecting a trend that is happening across the industry.

All retail bookshops have been affected by many internal and external factors, including the increasing marketplace domination of online, global retailers such as Amazon, the growth in the use of e-books and online learning and the strength of the Australian dollar.

Locally, the Bookshop has had to compete with a discount bookshop on the edge of the campus.

Taking into account the full costs associated with the services it provides, the Bookshop incurred a financial loss in 2010 and is projected to record losses into the future.

Concerned by the losses, the University commissioned an external review to investigate the reasons, as well as explore options available to bring the Bookshop back to profitability.

The review proposed five options. These included taking no action, investing significantly in new technology to make it competitive, selling to a specialist bookstore retailer and outright closure.

The University has decided that taking no action would be irresponsible, investing in new technology would be financially unfeasible and that it would be unacceptable to staff, students and the University community to not have a bookshop on campus.

In consequence the University has determined that the option of a having an on campus bookshop operated by a specialist retailer should be investigated, with the delivery  of books and academic references to the University community continuing to be one of the key criteria.

Although it remains to be market-tested, the University has received advice that a specialist retailer would deliver efficiencies in recruiting, purchasing, training and accounts and could provide an increased opportunity for new technology and modes of delivery (such as e-books, online content etc.) to enhance the range of services for University customers.

Accordingly, the University has decided to call for tenders from specialist retailers. It is intended that any decision as to a successful tenderer will be made during the first quarter of 2012, with implementation soon thereafter.

Bookshop staff are being consulted on the proposal, in accordance with the Collective Agreement. The University and the Bookshop board will be working together to ensure existing services are maintained during any period of transition.

Students and the University community will also be kept informed of developments.

Ian Marshman
Senior Vice-Principal