Michigan Book & Supply, two Ypsilanti bookstores to close as result of bankruptcy
Melanie Maxwell | AnnArbor.com
(See related story: What's next for closing Michigan Book & Supply in downtown Ann Arbor?)
The company — a subsidiary of NBC Acquisition Corp., which is downsizing under Chapter 11 bankruptcy protection — had announced in January that it was considering closing four of its Ann Arbor area stores.
NBC filed a revised bankruptcy reorganization plan on Friday, declaring that it would close about 40 stores by March 31, reflecting about one-third of its remaining off-campus locations. The company is preserving its on-campus stores, which are performing better.
In Ann Arbor, the closure of Michigan Book & Supply is particularly significant because of its high-profile location at the corner of South State and North University. That two-story property, on the edge of the University of Michigan's central campus, is located among the highest-priced commercial real estate in Washtenaw County.
In Ypsilanti, the closure of Campus Book & Supply at 1078 N. Huron River Dr. and Mike's Bookstore at 901 Washtenaw Avenue marks a blow to the Eastern Michigan University area business community.
It appears that NBC's Ned's Bookstore at 707 W. Cross St. has been spared closure, although a company spokeswoman could not be reached for comment this morning. Ned's and Mike's shared a store manager, who referred questions to the parent company.
The 40 stores account for $3 million in losses this year, NBC said.
"We knew we owed it to our creditors and the Company to make some changes," NBC President Barry Major said in a statement. "The Chapter 11 process allows us to initiate store closings if it will improve our overall financial performance; this decision does indeed improve our financial outlook."
Ulrich's Bookstore on South University Avenue in Ann Arbor escaped the list of closures. NBC on Jan. 17 received approval to extend the lease for Ulrich's through Aug. 31, 2016.
Under bankruptcy law, companies can reject leases with court approval. Although lease parties can file objections to the proposed closures, judges typically favor the debtors.
The closures underscore the many challenges facing off-campus college bookstores, including on-campus competitors, online giants like Amazon.com and the emergence of e-textbooks.
"The college bookstore model is not what it used to be," said Michael Norris, a publishing industry analyst with Maryland-based Simba Information. "It's not the concessions selling $7 Milk Duds. It's just one possible channel for book purchasing out of many."
Rising tuition and the nation's prolonged economic downturn have also pummeled bookstores.
"College costs have just been rising at very high rates over the years, and at the same time students have just been under even more pressure to pay off these enormous loans that they’re taking and of course to pay for the operational costs of college, which obviously includes textbooks," Norris said. "College students are looking around for cheaper prices and a lot of them are buying books online."