Indigo Books & Music, the new name for the combined Chapters and Indigo bookstore chains, reported that total revenues for the second quarter ended September 29, 2001, rose 1.2% to C$155.9 million ($99 million). The net loss in the quarter was C$31.3 million, a figure that includes C$21.2 million in restructuring and other charges related to store closings and merger costs. The net loss in last year's second quarter was C$7.8 million. EBITDA (earnings before interest, taxes, depreciation and amortization) in the period was C$1 million, compared to an EBITDA loss of C$2.9 million a year ago.
Total retail revenues rose 5.5% in the quarter, to C$149.0 million. Results reflect sales from the addition of 15 Indigo superstores for seven weeks following the completion of the merger with Chapters as well as five new Chapters superstores. As a result, superstore sales rose 12.4%, to C$104.5 million, in the quarter, as the new stores offset a decline of 3.1% in same-store sales, a drop the company attributed to "the addition of stores in shared areas." Revenues at mall stores fell 9.3%, to C$37.4 million, as the company closed 24 stores and comparable-store sales fell 0.7%.
Online revenues fell 46% in the period, to C$6.9 million, as the company reduced its marketing initiatives and placed a greater focus on cost containment. The operating loss for the unit fell to C$1.3 million in the period from C$8.5 million.
For the first half of the year, total Indigo revenues inched ahead 0.1% to C$291.2 million, and the net loss increased to C$38.2 million from C$20.5 million. Retail sales were up 3.8% in the six-month period, to C$264.8 million, while online sales fell 36.2%, to C$16.2 million.
Heather Reisman, president and CEO of Indigo, said that, given shaky consumer confidence, "we expect the upcoming holiday season to be extremely challenging."
