From Yahoo Finance:
Indigo Books & Music Inc. (CNW Group/Indigo Books & Music Inc.)
Revenue for the first quarter ended June 29, 2019 was $192 .6 million compared to $205.4 million for the same period last year, a decrease of $12.8 million . This decline in sales was the result of a strategic shift to reduce promotional activity to improve profitability and eliminate unprofitable sales.
. . . .
Additionally, the general merchandise business continues to be affected by softer discretionary spending in certain categories core to the Company, while the book business has sustained historical trends.
Commenting on the results, CEO Heather Reisman said: “This quarter’s results were in line with our expectations. While we continue to face many of the same headwinds from last year, strategic steps to recharge growth, increase productivity and improve profitability are well underway. We remain confident in our investments over the long term and in the steps we are taking.”
Indigo reported a net loss of $19.1 million ( $0.69 net loss per common share) compared to a net loss of $15.4 million ( $0.57 net loss per common share) last year. This decline in profitability was attributed to the decline in sales and restructuring costs, partially offset by lower selling, administrative and other expenses as the Company continues its cost-cutting initiatives.
Link to the rest at Yahoo Finance
So let me get this straight:
This ‘strategic shift’ caused their sales to go down by $12.8 million, and their losses to increase by $3.7 million. A little back-of-the-envelope math tells me that the net profit margin on the sales they lost was 29 percent. Their net margin on the sales they still made was, um, minus 10 percent.
Yeah, they sure targeted the unprofitable sales, all right.
Five gets you ten what ended up happening was that they didn’t target actual unprofitable sales, but what certain people in the company thought should be unprofitable sales.
Knowing what I know about Indigo’s top management, I imagine what they really did was target sales that they thought were icky and déclassé. The thought of selling people what they want, as opposed to what a billionaire’s limousine-liberal wife thinks they ought to want, revolts them.
More here
https://www.bnnbloomberg.ca/indigo-can-still-compete-in-extremely-tough-amazon-era-analysts-say-1.1302719
1. No more US stores this year.
2.
A long time ago, (2011) Eoin Purcell pointed out that in the age of ebooks, booksellers faced three choices:
– Bet on digital: get into ebooks
– Bet on print: focus strongly on pbooks
– Bet on retail: leverage the storefronts
In his eyes this was an either/or decision: everything on one.
https://eoinpurcellsblog.com/tag/betting/
B&N tried to do all three and did them all…less than effectively, shall we say. They lost most of their value and ended up sold at a deep discount. (70-75% off peak)
Indigo started doing all three but (smartly) flipped Kobo to Rakuten at peak value. (A charge against goodwill impairment followed.) Until recently, their strategy seemed to be to bet on non-book, “lifestyle” merchandise. It worked…for a while. Books aren’t live-or-die anymore but they don’t seem to be helping.
Waterstones under Daunt bet on pbooks. He got rid of digital, he got rid of payola, and went hyperlocal. So far, it seems to be working in the UK. Now to see if it works in the US.
Other players have survived by betting on print–selling, new, used, remaindered, whatever and wherever, especially online–or by leveraging retail *location*, most notably Hudson although to be fair, they’re not a classic bookstore any more than Amazon.
Eight years later and the choices for bookstores seem to have reduced to “ride the pbooks” as long as they can.
The story is ongoing.