Reisman Plans Indigo Merger, Store Closings

After a protracted battle to take over Chapters Inc., Trilogy owners Heather Reisman and her husband, Gerald Schwartz, have finally gained control of the chain. Now that Reisman has been appointed CEO of Chapters and Chapters Online, she can get to work on her vision of merging the chain with Indigo Books, Music and More. Details of the proposed merger and Reisman's plans are scarce, although Reisman has told the Canadian media that she intends to close up to 16% of the superstores and to limit book discounts while offering faster payments and fewer returns.

Reisman has also said she plans to get Chapters out of the wholesale business by selling or seeking partners for Pegasus; she has already spoken to various companies, including Ingram Book Group. But booksellers are still wary of this potential merger, which is being examined by the Competition Bureau. Sheryl McKean, executive director of the Canadian Booksellers' Association, sounded upbeat but apprehensive about the deal, seeing it more as an opportunity to set some ground rules.

"We are working with the Competition Bureau with respect to remedies we would like to see. If those remedies are in place, and publishers gain some of the concessions they are looking for, then the door is open for us to step through," McKean told PW. "This is an opportunity that we might not otherwise get. Hopefully, we'll see a healthier book market and a reemergence of smaller bookstores. We could be able to see a lot of advantages for Canadian readers through all of this," McKean added.

The CBA will ask the new Chapters-Indigo chain not to enter into any restrictive covenant agreements relating to the leasing of space to other booksellers in the same vicinity. CBA is also interested in seeing store closures in markets that are oversaturated. "We want to see some relief, to see other people emerge," McKean explained, adding that CBA wants the new chain not to have an upstream wholesaler such as Pegasus and also wants the new chain to get out of the campus leasing business. Most significantly, the CBA is looking for a moratorium on growth once the merger is approved.

McKean wouldn't say whether Indigo is easier to deal with than Chapters, but she did note that the lines of communication have been more open with Reisman: "We've had ongoing opportunities to speak to Heather Reisman, and she informed CBA before an announcement came out. That's a style that's very, very welcome."