Canada’s dominant book retail chain Indigo Books and Music has announced that its net earnings for the third quarter ended December 26 were up 29% from the comparable quarter the previous year. Earnings jumped to C$34.5 million ($32.4 million) compared to C$26.8 million ($25.2 million) in 2008.
"We are very pleased to report these earnings, particularly in the current environment,” said CEO Heather Reisman in a statement. “The results reflect the impact of our ongoing efforts to improve store experience, productivity and customer loyalty. We are equally pleased with top line sales - achieved notwithstanding being against last year's massive success of the Stephenie Meyer Twilight series."
Revenue for the third quarter was C$340.2 million, up C$10.2 million from 2008’s figure. Large format Indigo and Chapters stores recorded 3.4% growth, but Coles and Indigo Spirit small format stores were down 1.6%. Online sales on chapters.indigo.ca dropped 2.7 per cent to C$29.3 million.
During the quarter, Indigo transferred all the assets of its e-bookstore Shortcovers, which had been launched early in 2008, into a newly formed company, Kobo Inc. (www.kobobooks.com). Kobo raised C$16 million in funding from partners, including C$5 million from Indigo, and investment from Borders Group Inc., Instant Fame, a division of Cheung Kong (Holdings) Limited of Hong Kong, and REDGroup Retail PTY Ltd of Australia. Indigo reported a C$2.1 million increase in pre-tax earnings as a result of the transaction and continues to own 58% of the company.
Reisman, who is chair of Kobo, said that "Indigo and Kobo are very well positioned to play a major role in the emerging e-book revolution both in Canada and globally." Kobo sells e-books that can be read on a range of devices including smartphones, computers, and compatible e-readers, and the company said it will soon have an application ready for tablet computers. It has announced plans to release its own e-reader device that can be sold in its partner Borders Group retail stores.
During the third quarter, Indigo opened one new superstore in Laval, Quebec and expanded its children’s departments in four locations.