Tucson: Bookmans Expands Online

Bookmans buys space on south side

140,000-square-foot warehouse to help firm’s rising online business

By Dale Quinn

ARIZONA DAILY STAR 7/21/2010

Tucson-based Bookmans Entertainment Exchange has purchased a 140,000­square-foot warehouse on the city’s south side to ac­commodate its growing on­line business.

The sale price on the transaction — filed Tuesday in the Pima County Recorder’s Office — was $4.375 million.

Bookmans sells used books, music, movies and video games at three local stores. It expanded its oper­ations to the Internet several years ago, said Bookmans Chief Financial Officer Jim Lubinski.

“We’ve experienced con­sistent growth month over month for three-plus years now,” Lubinski said.

In its online business, the company sells books and CDs acquired at its stores through third-party web­sites such as Amazon.com, Lubinski said. But Bookmans has plans to launch its own online store this fall, he said.

That store would attach to the company’s existing website — www.book­mans. com — and would of­fer the same array of prod­ucts sold at the physical lo­cations, Lubinski said. The online store will continue the company’s business model of selling merchan­dise purchased from cus­tomers.

To prepare for the in­creased demand for prod­ucts the new web presence will create, Bookmans de­cided to expand from its current 25,000-square-foot warehouse to a larger one, at 5120 S. Julian Drive near In­terstate 10 and South Palo Verde Road, Lubinski said.

It bought the warehouse through a holding company called WarehouseoneLLC. Bookmans bought the property from Palo Verde Ventures LLC, a related entity of Beaudry RV Company.

Beaudry had planned to use the space to operate an indoor service center and showroom, but those plans hit a snag as the RV industry stalled during the re­cession, said Beaudry CEO Thomas Sylvester.

“Because of the contraction in the RV industry, we didn’t feel it was feasible for five to eight years,” Sylvester said. “We de­cided that was excessive.”

As part of the deal, Beaudry agreed to lease back some of the space. The RV dealer will use about 5,000 square feet for ad­ministrative offices. Another 50,000 square feet leased by Beaudry will be available for rent for special events, such as gun or car shows.

That leaves about 85,000 square feet for Bookmans for its online fulfillment center. Lubins­ki said Bookmans, which has stores in Mesa, Phoenix and Flagstaff in addition to its Tucson locations, has seen its online rev­enue steadily rise through the years. He wouldn’t say specifi­cally how much cash the online sales generate, but they do make up a bulk of the company’s in­come, he said. Still, the company doesn’t have any plans to start shutting down stores because of an in­creased reliance on the Web, he said.

“If anything, it may give us the impetus to open more stores,” Lubinskisaid.“So we havethe av­enues to acquire more inventory.”

Gary Emerson, of GRE Part­ners LLC, represented Palo Verde Ventures in the transaction. Bookmans’ holding company, Warehouseone, was represented by Brian Harpel of the Harpel Co. Inc.

Contact reporter Dale Quinn at dquinn@azstarnet.com or at 573-4197.