Just days after it revealed that it had received an offer to take the company private, Indigo Books & Music released its financial results for the crucial holiday season—and as even CEO Heather Reisman admitted, the results were “disappointing.” Sales for the period ended December 31, 2023 fell 12.3%, to C$370.6 million ($275 million), from a year ago. Meanwhile, net income plunged 70.5%, to C$10 million ($7.4 million).

Among the litany of factors it cited for the poor performance was the continued business disruptions from the ransomware cyberattack that Indigo first experienced on February 8, 2023. Although Indigo reported that it had “almost” returned to “full operational function” by last June, in its quarterly report the retailer said the attack, as well as “the pre-mature launch of a new digital platform” in August, continued to affect business in the most recent quarter, particularly in its online sales channel. Online sales dropped 28.5% in the quarter, while sales at Indigo’s superstores fell 8.5% and declined 6.4% at its small format stores.

Sales of print products—which Indigo defines as books, magazines, newspapers, and e-readers—fell 8% in the quarter, but still did better than the general merchandise category where sales fell 18.5%. As a result, print accounted for 48.6% of quarterly sales up from 46.3% a year ago, while general merchandise revenue accounted for 47.8% of sales, down from 51.5%. Since Reisman returned as CEO last September after stepping away earlier in the summer, Indigo has put a renewed focus on selling books, following Reisman's observation that the bookstore had moved too far away from books. In a prepared statement, Reisman said that the most recent results “in no way reflect the opportunity we have with our customers. We are deeply and effectively engaged in a turnaround.”

To facilitate that turnaround, Indigo said that in the last quarter it took steps to improve customer engagement, enrich its book assortment, and simplify its lifestyle offerings. To clear out the general merchandise products it now intends to de-emphasize, Indigo implemented deep discounts, which it said was a factor in the decline in earnings. To improve the bottom line, the company has implemented layoffs throughout the organization, including at its headquarters.

For the first nine months of fiscal 2024, sales were down 12.4%, to C$756.7 million, and the net loss jumped up to C$40.9 million from C$7.1 million in the first nine months of fiscal 2023. The company did not provide a financial forecast for the rest of the fiscal year, but in its quarterly report it said that “the ransomware attack has had an impact on sales and profitability in the year, the extent of which is difficult to reasonably quantify. Management cannot predict the complete and long-term financial impact of the ransomware attack.”

The bad financial news comes as the company's board considers the offer made by two investment firms controlled by Canadian billionaire Gerald Schwartz—an Indigo board member and Reisman's husband—to take the company private by buying all outstanding Indigo shares for C$2.25 per share.