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Friday, November 5, 1999
Houston, Texas
Volume 65, Issue 54

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College stores sue Varsitybooks.com

By Jim Parsons
Daily Cougar Staff

Online textbook retailer Varsitybooks.com is facing a lawsuit alleging false advertising in the midst of its $75 million initial public stock offering.

The National Association of College Stores, a coalition of 3,000 college bookstores, alleged in a suit earlier this week that Varsity's claims of selling texts at 40 percent below the "suggested price" is false.

NACS officials say the college textbook market has no pricing standard and that the online bookstore's prices offer a 40 percent savings only in some cases.

Darren Croom, general manager of the University Bookstore, which is a NACS member, agreed.

"It's tough to get an actual firm grasp on (discounts) because there are so many different types of books you talk about," Croom said. "It can be misleading, but it's a title-by-title thing."

Nevertheless, he said claims of 40-percent discounts across the board would be false. "The overall pricing structure is not even close to 40 percent below," he said.

Varsitybooks.com officials have not responded specifically to the allegations, but Jon Kaplan, a company spokesman, told the Duke Chronicle that the charges are "completely without merit."

In the meantime, the company has toned down its savings claims. Despite rumors that NACS filed the suit to stop competition, Croom said he felt the action was simply a matter of leveling the playing field.

"You can't allow your competitor to have false advertising," he said. "If this lawsuit drives Varsity out of business, they probably shouldn't have been in business in the first place."

Public finance reports from Varsitybooks.com indicate the company had $5.1 million in revenue in the first eight months of 1999, less than 1 percent of the $5 billion-per-year college textbook industry.
 

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