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It’s All Our Fault
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Business New Haven
4/16/2001
By: BNH
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LEXINGTON, Ky. - Only four months after the Yale Co-op closed its doors for good, Wallace's College Book Co., the firm that was supposed to save the foundering Co-op, has itself filed for Chapter 11 bankruptcy.
The Yale Co-op's lease with Yale University Properties expired in 1997, forcing the retailer to vacate its longtime Broadway location and into the Chapel Square Mall to make room for the new Barnes & Noble Yale Bookstore.
In January 1999 Wallace's was hired to manage the Co-op and signed a ten-year contract with its non-profit board. But because of the Co-op's location and competition from Barnes & Noble, Wallace's was never able to steer the Co-op around the financial corner.
“The problem was, they were not able to make a go at it,” Co-op attorney Dean Baker told the Yale Daily News. “They lost in the high six figures within a year. Basically, they were throwing good money after bad, and they could've lost a million dollars easily, and that becomes a significant amount when you lose it year after year.”
Wallace's had competed successfully with other Barnes & Nobles in other markets. In New Haven, however, Wallace's inherited the Co-op's department-store model, even though Wallace's specialized in book sales. Since backing out of its Yale Co-op contract last September, Wallace's has been forced to shut down branches elsewhere. Following a first round of closings, Wallace's will be left operating 81 stores at 50 colleges.
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