Under New Management

TuckStuff, the student-owned purveyor of Tuck-branded merchandise, has changed its capital structure and has a new partner-the Tuck School.

So if you're in the market for a Tuck necktie, captain's chair, or golf ball, you'll be able to pick one up in the new permanent location on the first floor of Byrne Hall, where TuckStuff will soon display its wares. In addition to its new home, TuckStuff will have more continuity, purchasing power, and the support of the extensive connections the Tuck School provides. But these obvious changes reflect just the surface of the benefits the new partnership is expected to bring to the Tuck community.

TuckStuff began in 1986 as part of an entrepreneurship class. Each spring through 2003, the business was sold to a new student team through a bidding process-independent of administrative oversight. Over the years, the merchandise evolved, a website was launched, and the business grew from a two-person operation to an enterprise keeping nine people busy turning over hundreds of thousands of dollars annually. But success became a problem. The price of TuckStuff exceeded the ability of some student teams to buy it.

"We have taken that transfer cost out of the equation," explains Steve Lubrano T'87, assistant dean and director of the MBA program. "The students manage the business as if it were their own. We've simply provided the capital and infrastructure so that they can focus on the business operations. The school is much like a venture capitalist that has made an investment in the company. It's smart money, because we've been able to provide them with opportunities they could not otherwise take advantage of."

Some also complained that under the old structure, TuckStuff amounted to a profitable monopoly granted to a small group. The advantage with this new structure, by which a portion of the profits are shared with the student body and the school, is that the entire community is invested in the success of TuckStuff and the student team will still have incentive to grow the business and manage it well.

TuckStuff is now able to plan with a much longer time horizon, according to Christian Oberle T'05, a member of this year's operating team. "Instead of making decisions that have an impact on the owners for a year, we're making decisions for the long term," he says. TuckStuff now has a greater capacity to bear the risk of short-term losses from such things as testing new products, opening a permanent location, or carrying merchandise that enhances the Tuck brand but has low margins. "It will minimize the fallout from decisions that don't pan out," Oberle says.

But TuckStuff doesn't have free rein. "We also have a set of financials that could be opened up to a class. We have the ability to take greater risks, but we need to be able to defend our decisions in a transparent environment," says Oberle.

Each student management team will be selected by a committee consisting of the previous year's team and three members of the administration from the MBA Program Office.

This year's management team presented the selection committee with a vision for TuckStuff: the right products at the right place at the right time, serving all segments of the Tuck community, and a smooth transition with careful control of changes.

This past summer, for the first time, TuckStuff hired staff, who sold merchandise to the participants of the Minority Business Executive Program and the Tuck Business Bridge Program®. Both groups were eager to buy Tuck merchandise but had not been served before. For the future, the management team has designated members to cover every identifiable segment of the Tuck community-including prospective students, faculty, reunion planners, and administrative departments like public relations and career development. Managers expect a new synergy to develop in which, for example, serving the needs of the faculty will enhance the line of products that alumni find valuable.

"I hope alumni will send me suggestions about merchandise," Oberle says. "Comments won't fall into a black hole. We're seeking as much guidance as possible!"

While students wrestle with managing a rapidly changing, real-world enterprise, Tuck envisions new dimensions of service for TuckStuff. "We hope to introduce an academic component to the process," Lubrano says. "We'd like to use the location as a learning laboratory where, for example, an accounting class could audit the books, a new-products development class could come up with new lines, or an operations class could review the supply chain procedures."

Since the operation will be run as a student club, the school also hopes to bring in external speakers from the retail industry. "Many students have worked at high-end retailers in the summer, and the retail industry is becoming an increasingly attractive option for graduates," says Lubrano. "If TuckStuff hosts business leaders from the retail trade, students will learn more about that industry."

The main interest for students is in having hands-on business experience with real implications, Lubrano concludes. "They learn about managing a team for whom profits and losses are very real and emotions run deep, deeper than in an exercise that is solely academic. TuckStuff has been around for nearly 20 years-and no student group wants to be the one that leads to its demise."

For more information about TuckStuff visit the website at www.tuckstuff.com.

This article appeared in the Winter 2005 issue of Tuck Today, the school's alumni magazine.