Despite a C$10.7 million increase in revenues, Indigo Books & Music posted a C$5.3 million loss in its first quarter, which ended July 3, up from C$2.3 million last year. CEO Heather Reisman attributed the bigger loss to the company’s heavy investment in the e-bookstore Kobo. Originally a digital branch of Indigo, Kobo was spun off into a separate company last December but Indigo is still its major shareholder. "The increased loss is not unexpected as we continue to invest significantly in the growth and development of Kobo. We expect this investment to pay off materially in the mid to longer term," Reisman said.
During the quarter, Kobo rolled out its own e-reader device in Indigo and Chapters stores, and it is also being sold in Borders stores in the U.S.
Revenue for the quarter was C$204.3 million, up from C$193.6 in the same quarter in 2009. "We are pleased with our top line revenue growth, particularly from our rapidly growing digital business,” said Reisman. “Consumers have responded very favourably to our Kobo eReader launched in late May, and the business continues to gain traction in markets around the world."
Indigo and Chapters superstores posted 1.5% growth, while Coles and Indigo Spirit small format stores were down 0.7%. Sales from Indigo's online channel, chapters.indigo.ca were flat compared with last year’s figure.
