SANTA CRUZ — When UC Santa Cruz student Jason Marcus started Slug Books 10 years, he gave students a place to buy used and new books at a discount. Now, with more students buying textbooks on the Web, the Slug Books Co-op will say goodbye Tuesday.

A notice about the shutdown was posted on the Slug Books Web site, but it did not elaborate on the reasons for the closure. A member of the student co-op that runs the store on Cardiff Place at the foot of campus declined to comment Friday and promised to e-mail a statement, but it never arrived.

News of the shutdown caught students and faculty by surprise.

"It's a shock and a loss," said legal studies lecturer and Councilman Ryan Coonerty, who ordered a book from Slug Books on the First Amendment for his summer course.

"I assigned most of my books out of Slug Books," he added. "I liked the idea of a student-run co-op. I thought they could get my students a good deal. I thought it would last a lot longer."

Other faculty referring students to Slug Books include Richard Montgomery, chair of the math department; Crown College science lecturer Eric Cummins; and Juan Poblete, provost of Kresge College with a specialty in Latin American literature.

"It's too bad nobody jumped in to keep the place afloat," said Montgomery, who said he relied on Slug Books to lower the costs of textbooks for his students. He said he got an out-of-print reader reprinted and offered for sale at Slug Books for $12.

The student co-op developed exclusive arrangements with some faculty members. That guaranteed the bookstore a market and allowed the co-op to lower prices because certain sales volumes were assured.

However, some students felt the arrangements were nothing more than a textbook monopoly.

In an opinion piece for the City on a Hill student newspaper last spring, Phoebe Lipkis called on university officials to require faculty book lists be made public three weeks before classes begin so students could shop for the best price.

"In our day and age we have access to sources other than on-campus bookstores," she wrote.

Some online textbook sites, such as Amazon.com and eBay's half.com, enable students to buy and sell books for a lot less than published prices. The downside is shipping can take few weeks, and students can be loath to go without a textbook for that long.

All bookstores have to contend with the Internet, argued a former co-op member, Andrew Crane-Droesch.

"Why did we fold instead of them?" he asked.

A 2003 UCSC graduate with a master's degree from Columbia and a job at the United Nations, Crane-Droesch recalled working long hours, firing workers who didn't measure up and persuading professors to sign up for exclusives.

He envisioned a bright future when Slug Books got an agreement to provide freshmen at Colleges Nine and Ten with readers.

"That's when we first broke a million dollars," he said. "We thought we were going to take over the Bay Federal building."

But something went awry.

Joe Paquin, a UCSC senior wearing a Slug Books T-shirt Friday, said he's been hearing about financial problems at the co-op for the past six months.

"Each time there's turnover, they inherit more debt," he said.

This fall, the student co-op failed to provide copies in time for students in the College Nine and Ten core course, freshman Nicholas Margarite said.

"Our teacher said she would never use Slug Books again," said Robert Chua, another student in the class.

"The book market is hard, but the textbook market is the hardest," said Coonerty, whose family owns Bookshop Santa Cruz. "The return policies are brutal."

He said his family's store tried to carry textbooks but found they were not economically feasible.

With the shutdown of Slug Books, Coonerty said he will order books through Bookshop Santa Cruz and Bay Tree Bookstore on campus.

"Bay Tree is convenient but expensive," Paquin said.

Some professors order through Literary Guillotine, a bookstore in downtown Santa Cruz specializing in the humanities. University customers are only a small part of the overall clientele, although the store has exclusive arrangements for some classes.

"I'm sure our business will increase some," said owner David Watson, who graduated from UCSC in 1979 with a history major. "We've all lost business to the Internet. In the early going, we probably lost 50 percent to the Internet. Then, as time evolved, 40 percent has come back."

While many Web sites sell textbooks, buying online can be frustrating for students. For example, if 100 students try to order a $100 textbook discounted to $10 online, only one will actually get the book.

"At Literary Guillotine, the book is always there," said Watson, who has run the business for 16 years.

Ironically, Watson helped launch Slug Books a decade ago.

When founders Marcus and Amie Dudovitz were looking for startup cash, Watson supplied him with books because the pair didn't have any accounts or credit.

"I've been told what an idiot I was," Watson said. "I never thought we were in competition."

Sentinel staff writer Roger Sideman contributed to this report.

Contact Jondi Gumz at jgumz@santacruzsentinel.com.