U-Store hit with $133K loss in fiscal year 2009

In January, the U-Store scaled back from a 24/7 schedule and began operating only between 8 a.m. and 3 a.m., and U-Store president James Sykes said the cutback saved about $40,000 annually in decreased salaries and expenses. He explained that the store extended its hours to 4 a.m. on Nov. 8 because of the number of requests from patrons for later operating hours.

“We felt we could extend it the one hour without significantly increasing our expenses,” Sykes said in an e-mail. “We are planning to continue with the later closing through this school year.”

The store’s financial statements for this fiscal year, available on its website, show a $198,879 net loss for the fiscal year ending in June 2008 and a $133,829 net loss for the fiscal year ending in June 2009. The store posted sales of $6,236,180 in FY2008 and $6,672,210 in FY2009.

“The reason for the initial loss after five straight years of profit was the change in our business model with trade and text books going to Labyrinth,” Sykes explained. “This resulted in us moving our Insignia business to Nassau Street and reducing the space at our University Place store, as well as remodeling the remaining space.”

He explained that the FY2009 net loss was primarily the result of the economic downturn and a decrease in sales in Insignia merchandise.

“We started experiencing a softness in business just like other people did — started seeing it in September of last year,” he said. “That was the first news that we had. Basically, the business has continued to be weak since then, although it has started getting stronger in the past few months.”

The decision in January to scale back operating hours was made unilaterally by Sykes, though the store’s board includes four student trustees normally involved in the decision-making process. Sykes explained that an analysis at the time showed that the store generated less than $50 of sales per day during the hours that were cut.”

“It wasn’t viable for us,” he said, “We did what we thought was necessary at the time.”

Sykes added that no future cost-saving measures have been planned, though sales are still challenged by the softness in the economy.

“We are optimistic we will see some improvement beginning about now as we will be against the depressed numbers from the beginning of the recession last year,” he said.

Other future prospects for the U-Store include the introduction of new vendors beginning in 2010. The store will cut back on Russell Athletics apparel and add Champion and Under Armour products to its lineup.