Chapters Cuts Loss in First Quarter

Chapters Inc. reported that the restructuring of Chapters Retail, Chapters Online and the Central Distribution Centre has resulted in improvements in the company's consolidated operating results for the first quarter ended June 30, 2001.

Chapters lost C$7 million ($4.6 million) in the first quarter, down from a loss of C$12.7 million ($8.2 million) from the same period in 2000. Revenues fell to C$135.3 million ($88.1 million) from C$136.9 million ($89.1 million) for the same period in the previous year. Superstore sales rose 4.6% to C$87.2 million, although comparable-store sales were off 2.3%. Sales at traditional stores fell 4% to C$35.7 million due to a net loss of 23 outlets. Same-store sales were up 3.6% in the quarter, the first time in more than two years that comparable-store sales were up at the traditional stores.

Chapters Online, which is being purchased by Chapters Inc., announced separately that it lost C$2.7 million in the quarter, an improvement from last year's loss of C$9.9 million. Revenues were C$9.4 million, down from C$12.7 million for the same quarter the year before.

At its annual meeting, 86% percent of Chapters shareholders voted in favor of its merger with Indigo. Chapters will change its corporate name to Indigo Books and Music Inc. in mid-August.