Total revenues for the company declined by $15.1 million, or 8.1 per cent over the same period in 2012. Individual store sales were down 7.3 per cent in the superstores and 13.1 per cent in smaller format locations. Although the report credits the Fifty Shades of Grey and Hunger Games trilogies with boosting sales in 2012, the lack of a similar blockbuster in the first part of 2013 has apparently resulted in shortfalls.
Interestingly, the report states that sales are down for both physical books and e-readers. “Online sales remained flat at $17.8 million,” the report states. Also interestingly, when sales of the Fifty Shades and Hunger Games trilogy are removed, there is a 5.3 per cent increase in online sales over the first quarter of 2012. “Although in-store physical book sales have declined,” the report says, “online book sales have seen less erosion as more customers move to purchase books online instead of in-store. Additionally, online sales of lifestyle, paper, and toy products continue to grow.” The report credits the growth in part to Indigo’s redesigned website.
During the first quarter of 2013, which runs through June 29, Indigo “did not open any stores and closed one small format store.” Overall, the company is operating eight fewer stores than it did in 2012.
Costs of sales and operations both decreased year-over-year, the former “due to lower sales volumes and efficiencies gained from the Galileo productivity initiative,” and the latter due in part to running eight fewer stores. The report states that the decreased cost of operations was partially offset by higher costs devoted to online marketing.
The company’s total liabilities decreased to $213.1 million (from $215.3 million), although the quarterly report stipulates an increased liability of $3.7 million in unredeemed gift cards, something publishers that have previously been stuck with extraordinarily high volumes of returns must view with a certain schadenfreude.
In all, the report does not seem like a bellwether of a healthy sector for in-store sales, at the very least. Notwithstanding the difficulties the company is facing, the cover page of the report features a sunny quote from Maya Angelou: “You can’t use up creativity. The more you use, the more you have.” The quote comes from the 1989 volume Conversations with Maya Angelou. A quick check of Indigo’s website indicates that the book is out of stock in all 10 of its downtown Toronto locations.