Indigo Books & Music, Canada’s largest book retail chain, reported that revenue in the second quarter ended September 29, declined 5.9%, to C$185.6 million. The company attributed the drop to a delay in the planned launch of new Kobo e-reading devices and the fact that it was operating seven fewer Coles book stores. Indigo sold Kobo, its digital reading arm to Japanese Rakuten in 2011, but it still distributes Kobos e-reading devices.
Revenue dipped more deeply at Indigo and Chapters superstores with comps off 6.5% than in smaller format Coles and IndigoSpirit stores, where comps were down 2.2%.
In the last year, Indigo has diversified into a higher proportion of non-book inventory — gifts, accessories and décor items. In this quarter, Indigo said book sales were down “modestly” compared to last year, “owning to strong title as well as effective efforts to drive book sales both in store and online.”
The net loss attributable to shareholders from continuing operations decreased from a loss of C$28.8 million last year to a loss of C$4.0 million this year. According to Indigo, the significant reduction in net loss was due to there being no impairment charges in the current year. In last year's second quarter, the company recorded a full write down of the C$25.4 million of goodwill allocated to the Indigo segment.
For the first six months of the year, sales were down3.4%, to C$372.1 million, while the loss was cut to C$9.5 million from C$40.8 million.
CEO Heather Reisman commented: "We are focused on driving significant margin and productivity improvements and are pleased that our on-going efforts are reflected in our results. We will continue to broaden our assortment in our key growth categories to drive higher top line sales to offset the decline in physical books.” She added that the company is pleased to have the newest Kobo e-reading devices in stores now for the holiday season.
