An off-campus H-Zone logo wear store that was supposed to help boost the University of Hawaii athletic department’s bottom line is instead losing money and is in danger of being shuttered, the Board of Regents was told Wednesday.

When they were asked to approve re-branding athletic logo wear sales and move them from the purview of the campus bookstore to athletics, including a lease for an expanded retail location in Ward Centre two years ago, Regents were assured the enterprise should shortly produce a $500,000 annual profit.

At a Regents committee meeting Wednesday, Glenn Shizumura, director of the UH Office of Internal Audits, told the board, “Based upon the information that we have, they are very far (from $500,000).”

When Regent Jeff Portnoy inquired: “How far?” athletic director David Matlin replied: “About $500,000 away. It could be further.”

The board was told the store formerly known as the Rainbowtique at Ward Centre had sales of $672,773 but is losing about $40,000, not including trade value to the landlord, Howard Hughes Corporation, due to “low sales and high lease costs.”

With overall multi-site operations, including online sales and distribution at mainland athletic events, the H-Zone is running at a loss of $1,444, a UH report said.

UH said it pays about $8,300 per month for the 1,465 square foot Ward Centre location.

The on-campus Stan Sheriff Center H-Zone store has turned a $30,648 profit and a stand at Les Murakami Stadium produced a $5,347 profit, UH officials said. Athletics does not pay rent at those locations.

UH does not control merchandising at Aloha Stadium, where it plays its football games. Those rights are held by the concessionaire, Centerplate, though it may sell inventory to Centerplate.

UH said it received $347,533 in athletic licensing revenues in 2015, down from $472,320 in 2010 largely due to team performances.

In addition to low sales at the Ward centre location, auditors have raised continuing questions about operating procedures.

Joel Matsunaga, special assistant to the athletic director, told the board, “I don’t think there is a chance that (this) is ever going to be a $500,000 contributor to athletics.”

Matlin, who took over athletics in April, said the department has embarked on a three-month study to see if the Ward Centre location can become viable or even a break-even enterprise and is looking at several models, including closing the store. “The reality is that we have a lease (through June 30, 2017),” Matlin said.

UH said it has looked into the possibility of relocating the Ward Centre store to kiosks at Ala Moana or Pearlridge. Moving to “another physical location (is) likely to result in even larger losses,” officials said.

Regent Benjamin Kudo questioned, “whether you folks (athletics) are suited” to run a retail operation and regent Stanford Yuen asked officials “to consider termination” of the Ward Centre store.

Portnoy said, “It is a dying proposition and I think we ought to seriously think about putting it out of its misery and taking it off life support before we lose another $500,000.”