Updated: Sep 30
With my intermittent visits to Chapters and Indigo bookstores throughout the pandemic, I couldn't help but notice, their non-book selections seemed to be consistently growing. And I've wondered, when would they pass that 50% mark?
With Chapters Rideau's announced closure in September of 2022, and their reopening as Indigo in the Rideau Centre, self described as having a "curated assortment of books, but also more lifestyle products and inspiring displays," it became obvious to me, they were no longer a bookstore but a knickknack store.
And now we see a wave of top executive departing. Indigo announced the sudden departure of CEO Peter Ruis in the first week of September '23, after just a year in the role. That was a day after Andrea Limbardi - the company’s president and a two-decade veteran of the firm - announced that she too was leaving.
Indigo founder and chairperson, Heather Reisman, announced just a month earlier (August), her retirement along with the departure of four board members in June. That's quite the exodus and follows a significant sales hit after a ransomware attack in the spring that took its in-store shipping offline for weeks.
Over the past five years Indigo's stock value has fallen. At approximately $14 a share in September of 2018 down to $ 1.23 as of Wednesday last week.
Indigo's August's general merchandise sales dropped by 16.4% last quarter and it's print sales (books) dropped by 12.3%, but saw a growth in its "bargain books," likely due to the economic recession
It’s not a good time for luxury items.... and what Indigo sells is definitely not necessities. Books are a luxury.
And that puts Indigo in an awkward position. Luxury retailers can continue to cater to clientele who still have disposable income. Bargain stores cater to struggling customers. But where does that leave Indigo? Possibly in an untenable position.
With a slowdown in the economy, offering discounts will put even more pressure on their profit margins, which could translate into layoffs and cost-cutting in a desperate attempt to maintain sales. Possibly even seeing a restructuring or rebranding of what exactly Indigo is.
But what exactly is Indigo?
The company's autumn plans for a new urban store in The Wells building (Toronto).
They would serve beer and wine, coffee and pastries, allowing shoppers to meander about arcade machines and music jukeboxes. Former CEO Rius described this new store as a "cultural emporium." It sounds to me like Indigo is questioning its very reason for existing; an identity crisis. They have forgotten what they are; namely a bookstore.
Indigo has diversified into lifestyle products, and I fear, at the expense of books. Books represent approximately 57% of Indigo’s business, according to the most recent quarterly earnings. So, they ARE approaching that 50% mark.
The publishing industry was shaken up by Amazon, birthing the rise of the indie-author phenomenon, but independent bookstores had a resurgence. Shoppers want a bookstore to be-a-bookstore. Consumers want that one-on-one relationships with indie bookstores, and this is an advantage over the big box stores.
Indigo's new model of bookstore-turned-lifestyle brand over the past decade has been very concerning.
Is this a bookstore or is it something else?
It might sound like I'm picking on Indigo, and in a sort of way, I am. As the biggest conglomerate to take over the book industry, and closed all too many local independent bookshops, they deserve to be watched with a critical eye.
But what does all this mean?
Horror vacui. Nature abhors a vacuum, and these trials and tribulations of Indigo have definitely left a vacancy and vacuum.
Publishers, authors, and book readers and lovers should be sitting up and paying attention. This will change the landscape. This will affect how we purchase, sell, and read literature. This will affect how - or even if - authors write books, and if publishers release and sell books.
We have already seen the beginning of changes. Toys R Us Canada locations now have their own children books' sections. (And on a side note, one of Broken Keys Publishing's authors might be making an appearance at a local Toys R Us location in the near future!)
What do I see in the not-too-distant future?
I see the return of the smaller, local bookstore.
There's an adventure brewing on the horizon. Are you ready?
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