Indigo Books and Music, Canada's leading book retailer, reported third quarter sales of C$383.7 million for the period ended December 29, 2019, down 9.9% from the comparable period in 2018. Online sales fell 12.7% for the period compared with 2018, when the chain was also dealing with a postal slowdown; comparable store sales were down 10.1% in superstores and 11.2% in small format stores. Earnings, nevertheless, rose to C$25.8 million from C$21.5 million in 2018.

On the earnings call with investors, CEO Heather Reisman credited the profit improvement to "higher margin rates and a lower cost infrastructure." The company has limited promotional discounts and been implementing aggressive cost-cutting measures. This included closing its New York offices and moving design offices for its non-book items to Toronto. Altogether, Reisman said, Indigo has cut cost by C$20 million through the first nine months of the fiscal year.

Addressing the sales slowdown, Reisman blamed the dearth of bestsellers or a single breakout book that would bring customers into stores. "It's the first year I've ever been in the business, where there was not a single book, not a single book that gained any traction whatsoever," she said. "So just to give you some sense of what that means between last year in the third quarter. Our top two books accounted for several hundred thousand units. We didn't -- our top couple of books didn't altogether didn't break 100,000 units this year."

Reisman also noted that the popularity of video streaming services was having an impact on night-time traffic in the stores. "There's no question that binge-watching and the amount of time people are spending on their technology, it's having an effect on nighttime activity. And so that's where we've lost traffic that we have to try and pick it up at other times," she added. "We have a number of things we're trying to do to augment traffic on the weekends to make up for the traffic that we've lost in the night time."

One bright spot came from the launch of Plum Plus, the company's C$39 a year membership program, which contributed to a bump in revenue from "other sources," which increased 61.3% to C$5 million from C$1.9 million from the previous year.

For the first nine months of fiscal 2020, revenue was down 8%, to C$779.6 million and the net loss inched up to C$13.7 million from C$13.0 million one year ago.