Indigo Books & Music, Canada’s dominant bookstore chain, continues to have a tumultuous 2023. Late last week, Indigo announced the resignation of CEO Peter Ruis. Ruis had been CEO for little more than a year and joined the company in early 2021 before being promoted. CFO Craig Loudon and senior v-p and general counsel Damien Liddle will lead the company while the board of directors searches for a new CEO.
The news comes shortly after company founder Heather Reisman retired as executive chair and director of Indigo. Her exit followed the June announcement that four board members had abruptly resigned, including Frank Clegg, Howard Grosfield, Anne Marie O'Donovan and Dr. Chika Stacy Oriuwa. Dr. Oruwa said she was stepping down “because of her loss of confidence in board leadership and because of mistreatment; no reason was given for the departure of the other three board members.
New board members, who were formally elected to the board in late August, include former Penguin Random House CEO Markus Dohle; Joel Silver, previously an Indigo president who has also served as president and CEO of DavidsTea Inc.; Donald Lewtas, a former executive with Onex Corp.; and Wendy Evans, founder, president and CEO of Evans & Company Consulting Inc., a retail consulting business.
The management shake-up comes as Indigo continues to deal with sales declines. For the first quarter ended July 1, 2023, Indigo reported a 12% drop in revenue, with sales falling to C$179.2 million compared to C$204.6 million in the prior year period. Adjusted EBITDA for the quarter was a loss of $21.4 million, compared to a loss of $19.2 million in the prior year.
Print sales softened due to a lack of blockbuster titles, the retailer said. Sales in the retail channel decreased 10%, to C$130 million, for the quarter compared to $144 million for the same period last year. Comparable retail store fell 10% at superstores and 3% in small format stores. Online revenue, Indigo said, dropped 26%, to C$38 million.
The company blamed the poor performance on the lingering aftermath of the cyberattack that crippled Indigo’s website earlier in the year. “Inventory replenishment capabilities were challenged as a result of the attack, which impacted the assortment available in both the retail and online sales channels for the quarter. Furthermore, the ransomware attack impacted Indigo’s search engine optimization, which led to a weaker online presence and a decrease in online traffic,” the company said in a press release.
In late August, the company re-launched its website with a new design. The “digital glow-up” promises a “much improved online shopping experience,” Ruis, then CEO, said at the time.
Overall, the ransomware attack left numerous members of the Canadian publishing industry in a state of mild shock, with numerous small and medium-sized publishers concerned that they are missing as much as two months of sales data and that status reports about Indigo’s inventory are unreliable. “It’s a real mess for us – we don’t know what they sold and what they have in their stores and no one has rectified the situation just yet,” said one independent publisher, who did not want to be named.
Kristin Cochrane, CEO of Penguin Random House Canada, feels that the situation has been handled appropriately by the bookseller and is sanguine that the lingering challenges can be overcome. “The cyberattack on Indigo has been extremely difficult for them and the impact has been felt throughout the entire Canadian book industry," Cochrane said. “We worked closely with them at every level, every day, to serve readers across Canada and support their return to regular business. Each month since the attack we’ve seen improvements in many key areas like backlist inventory, online sales, with their team’s support of many important authors. And we share their optimism for a robust fall season and lots of momentum for books going into the holidays.”
Following the initial publication of this article Indigo contacted PW and said, "Although reporting to our vendors was delayed because of the ransomware attack, we’ve partnered with our publishers throughout the incident, and accurate reporting from that time period has been shared. We encourage any publishers with concerns to reach out to their direct Indigo contact to ensure we understand and can address their concerns."
This article was updated on September 15, 2023.