Indigo Books & Music has released more details about its financial performance for fiscal 2003, ended March 31. According to the Canadian bookstore chain's annual report, sales at its superstores were C$528.1 million ($385 million) in fiscal 2003, an 8.7% increase over fiscal 2002. Sales at Coles, the company's mall stores, fell 5.6%, to C$174 million, while online sales rose 12.6%, to C$39 million. Sales in Indigo's other retail operations, which include the sale of loyalty cards and a share of revenue in the Calendar Club and Campus Bookstore joint ventures, rose to C$38 million from C$31.4 million. In June, Indigo reported total revenue of C$779.2 million and net income of C$1.4 million (News, June 9).
A 5.3% increase in comparable-store sales was the main factor driving gains at the superstores, which the company attributed to improved customer service and inventory management. The sales decline at the mall stores was due to a combination of the closing of eight outlets and a 0.2% drop in same-store sales.
In her report to shareholders, Indigo CEO Heather Reisman noted that after a good first half of the fiscal year, sales at Coles began to fall in November, reflecting a decline in customer traffic at malls in general as more people began shopping at warehouse clubs and other large destination outlets. Reisman said the Coles concept "is in need of a rethink," and that the company is planning "a major effort in the coming year."
The company's strategy for its superstores will include closing underperforming stores and possibly opening new outlets. Reisman said that the company was able to close only two of the seven stores it wanted to shut last year, but that she hopes to close more stores this year. She added, however, that with the government-imposed moratorium on new store openings expired, Indigo is "beginning to explore new superstore opportunities."
Other plans for fiscal 2004 include expanding Indigo's gift offerings in a bid to double the sales of that segment in the year.
Although Reisman did not offer any predictions on how Indigo will perform in fiscal '04, she noted that SARS and the weakening American dollar will likely make this one of the worst summers for tourism ever in Canada. "The economic ripple effect of these conditions will hit hard and will affect our business as it will every specialty retailer," Reisman wrote.