Ruminator Faces End of January Closing

Macalester College, a major creditor of Ruminator Books in St. Paul, Minnesota, has given the 33-year-old store an ultimatum -- Ruminator must raise $500,000 by January 31 or close its doors and surrender its assets to the college. Ruminator's debt to the school now exceeds $600,000, according to the bookstore's stock offering Disclosure Document.

To raise needed funds, Ruminator is appealing to customers and friends to become shareholders to make the store "community-owned." Ruminator has been given approval by the state of Minnesota to offer shares of stock in the bookstore to Minnesota residents for $1 per share with a minimum of 250 shares. The offering is announced on a link on the Ruminator Web site, ruminator.booksense.com, asking, "Wanna buy a bookstore?"

The financial disclosure statement, required by the state to authorize the public offering, indicated that Ruminator Books has debts totaling over a million dollars. Store co-owner David Unowsky said that many people in and out of Minnesota have been contacting the store with offers to help. People at all financial levels are purchasing stock and several major events are scheduled this month to bring attention to the stock offering.

An undisclosed number of shares have been sold but Unowsky told BTW that "we plan to make this deadline and are encouraged by the response." The store, founded by Unowsky and now owned by Unowsky and Pearl Kilbride, his wife, has long been highly regarded as a vital component of the intellectual life of the community. In 2002, Ruminator hosted 225 author events. This past November, many authors took the opportunity to help the store raise funds through Ruminator's Author Artifact Auction. Well-known writers, including Paul Auster, Oliver Sacks, and Julia Alvarez, contributed unique items, such as broken reading glasses and a Romanian flag, for the auction. (For more about the auction, click here.)

A longtime textbook contract, which Macalester had with Ruminator, was suspended for the 2003-2004 academic year when Ruminator was unable to purchase the books. According to the disclosure document, store debts to book vendors amounted to over $400,000, most of which were past due. This past fall, Macalester ordered and sold the textbooks from a campus location and paid Ruminator staff to run the sales.

"We didn't have enough money to buy the textbooks," Unowsky told BTW. "The decision to have them [Macalester] do the textbooks this year was a joint decision, not a hostile takeover. The college has treated us very well in the last three to four months. They've agreed to make certain concessions so we could get other loans. They have agreed to reduce the amount of space we rent from them and have already reduced the rent."

Unowsky told BTW that the store's poor financial situation is the result of several decisions made about five years ago that "didn't work out. In moves to expand, we opened the second store in Minneapolis and a separate, textbook-focused location for students. We also bought a new computer system and didn't have the proper staff to use it properly. As our business grew, I wasn't able to adapt my 1970s laid back management style to the growing store. As things changed, I wasn't always a tough enough manager."

Ruminator, originally named Hungry Mind, changed its name in 2000 when it sold the rights to the name to an "online university" for an undisclosed sum. Ruminator Publishing Co. is a separate corporation operating in the same space as the bookstore. The Ruminator Review is a quarterly publication of Ruminator Books. Both the publishing company and the magazine are offered for sale by Unowsky and Kilbride. According to Unowsky, there has been interest in both businesses, but he's "not at liberty to say with whom." He noted that the most likely prospects are with not-for-profits.

Unowsky remains optimistic despite the financial difficulties. "The store is not up to our own standards right now. We don't have the books we should have now, but we intend to become a great store again….

People who are investing in us should realize that bookstores are not enormously profitable. People are not investing in us for a large return -- they believe in what we've done. They believe in what we've done for this community as an independent business. They believe in what we've done to preserve the First Amendment. No other bookstore is going to have a panel on the Patriot Act with representatives from both sides…. The support has been incredible."

The remaining days of January promise to be tense ones for Unowsky and the Ruminator staff. "I'm not a very good sleeper in the first place," he concluded, "And this isn't helping." -- Nomi Schwartz