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Indigo Owner Optimistic on Stores, Worried About Industry
Leah Eichler -- 3/20/00
Canada's second-largest bookselling chain, Indigo Books Music and Cafe, has been growing steadily in the last three years, proving itself to be a scrappy competitor to Canada's largest retailer, Chapters Inc. Last year, Indigo opened six new stores, bringing the total number of superstores to 14--all of them profitable, according to Heather Reisman, founder of Indigo. The company also opened Indigo Light, a hybrid version of its superstore. Reisman plans on opening between 25 and 30 more superstores and believes the Canadian market can handle about 75. Although Chapters just opened their 70th store, Reisman's outlook remains rosy.
"We experienced sales store growth of about 10% last year, which is really good. It was a great learning year, and it was a very exciting year in terms of launching our online service," Reisman explained. Online sales, she said, grew exponentially, making Indigo.ca the third most visited site in Canada. Although not yet profitable, the site boasts 150,000 subscribers and currently sells flowers in addition to Indigo's standard products. Reisman plans to take programs, such as in-house panel discussions, online, streaming each simultaneously with an in-store event. The company will also test-market promoting these types of programs outside of Canada.
Despite Reisman's optimistic outlook, Pegasus Wholesale--majority owned by Chapters--is already threatening to be a thorn in Indigo's side. "I can say one thing for sure, under no circumstances will Indigo purchase from Pegasus. So what d s that mean? If small publishers end up only being able to go through [Pegasus], then we have to say no thanks," Reisman admitted. "I realize there is a risk in this--and we're about having all the books--but we can't plan just for tomorrow. We have to plan for five years from now, and we will not contribute to a situation where we have to buy from a competitor that will easily jerk us around," she said adamantly.
If this stance prevents Indigo from purchasing certain Canadian titles, Reisman said she is more than willing to take the issue public--and she believes others, including publishers, should do the same.
"I think publishers are beginning to wake up and see that they need to take a pretty clear position for themselves. It would make me very sad to see the Canadian publishing industry become extinct, and right now, that is 100% where we are heading. Frankly, the writing is already on the wall," she said.
"The current structure of the Canadian industry is extremely threatening to publishers," Reisman told PW. "All of the legislation that kept Borders and others out was under the story that we need to protect the originators of Canadian culture. What has happened is the exact opposite. The entire publishing industry is vulnerable to the success--of lack thereof--of one player," she explained, referring to Chapters Inc.
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