The Hight Cost of Doing Business
CSU’s Business Arm Lost Over $50K Last Semester
January saw $5,000 more in sales than expected for CUSACorp, but lackluster finances at Reggie’s Bar produced another deficit last semester for the corporate arm of the Concordia Student Union, with a loss of $51,439 over four months.
CUSACorp manages Reggie’s and rents CSU space to Java U in the Hall Building. Though a for-profit entity, it is historically “not a very profitable organization,” according to CSU VP Finance
CUSACorp, on average, lost over $12,000 per month last semester.
“In the last five years of audited statements, any indication of profit [by CUSACorp] has generally come from Java U’s rental income, and Reggie’s generally eats up most of it,” said Lindsay.
Last semester, Reggie’s had $121,833 in sales, but according to Lindsay, that number would need to more than double for CUSACorp to profit.
In March 2010, it was reported by The Link that CUSACorp recorded their first profit ever—$66,623 from May 2009 to January 2010. It now appears that this report was overly optimistic, however.
“A very crafty accounting trick [was used] to make that appear as though there was a profit,” explained Lindsay. The CSU erased $228,205 in outstanding debt from CUSACorp, enabling the company to post a profit even without resolving the losses at Reggie’s.
It’s not the first time that CUSACorp’s business practices have come under scrutiny in recent years.
Because of the mismanagement of cash sales at Reggie’s, with drinks reported missing from inventory or being given out for free, the accounting firm Deloitte called CUSACorp “un-auditable” during the September 2010 CSU audit.
The CSU and its corporate branch are working with Reggie’s management to curb inventory losses. Less alcohol is going missing, according to Lindsay, but some drinks are still disappearing on Thursday nights, Reggie’s largest weekly event.
A new inventory system will be put in place at the bar this Thursday, adding more accountability for missing items to further cut down on the trend.
Price increases are not being ignored, Lindsay said, but because Reggie’s is also considered to be a student space by the CSU, turning a profit must be weighed against accessibility and demand from Concordia students. Things are looking up this semester, however.
“We’ve already seen a pretty solid January,” said Lindsay. “It’s not at the point yet where we’ll be saving ourselves,” he admitted, but it has translated to almost $5,000 more in sales than expected.
To help maintain momentum, new event nights are starting this month and a lighting system is being added. Lindsay said he hopes to have Queer Concordia back following the success of their last event. In the meantime, B-movie nights and ski/snowboard-themed Fridays are also being planned.
—with files from Adam Kovac