You’d think Indigo Books & Music, which controls about half the book-selling business in Canada, would be in a strong position to ride out the shake-out in retail. But you’d be wrong.
The bookstore chain, which also owns Chapters locations, swung to a loss in the fiscal year ending in March, the company reported Tuesday.
Indigo lost $31 million for the year, compared to a profit of $4.3 million the year before. Revenue fell for the third year in a row, down 1.3 per cent to $868 million.
The company noted part of the revenue decline has to do with the closure of five of its stores in the past year. Looking at same-store sales (which excludes newly opened or closed stores), Chapters and Indigo locations saw a decline of 0.9 per cent, while the chain’s small outlets -- Indigospirit and Coles -- saw a hefty 5-per-cent drop.
Indigo isn’t alone: The entire bookselling industry is suffering. For evidence, one need only look at the recent wave of bookstore closures in Toronto, or the disappearance of Borders, one of the U.S.’s two major big-box book retailers.
BookNet Canada reported earlier this year that book sales fell 3.4 per cent in Canada from 2012 to 2013. But their data covers only in-store sales of print books, “so the overall book market may be healthier than reflected,” the organization said.
Indigo is putting a positive spin on its earnings, saying it was actually the massive success of the Hunger Games and Fifty Shades of Grey franchises in 2012 that resulted in a decline in revenue in the 2013 fiscal year.
“Excluding the impact of the Fifty Shades and Hunger Game trilogies, revenue increased 1.3 per cent,” the company said.
“In an industry which is world-wide experiencing meaningful sales declines, we are pleased with the customer response to all our transformation efforts, with the sales performance, and with the potential for further growth and profitability moving forward,” CEO Heather Reisman said in a statement.
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