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Indigo Books & Music in 'growth mode' to open new stores: CEO Reisman
RITA TRICHUR1 hour, 45 minutes ago
TORONTO (CP) - After finally closing the book on its three-year restructuring, Indigo Books & Music Inc. is fired up for growth and is set to open a slate of new stores over the coming year, CEO Heather Reisman said Wednesday.

"We're in growth mode," Reisman told shareholders during an address at the company's annual meeting in Toronto.

"(There's) lots in the pipeline in the growth side of the business."

Canada's largest bookstore operator will add three new Indigo superstores in Ottawa, Windsor and Montreal to its portfolio, along with new smaller-format Coles boutiques in Toronto and Uxbridge, Ont., and Whitehorse.

The new store openings will mark the first chapter of expansion for Indigo since its mega-merger with rival Chapters in 2001. At that time, the company was required to divest certain holdings in order to win regulatory approval from the federal Competition Bureau.

Subsequently, the book store chain has re-engineered its supply system while expanding sales of gifts and lifestyle products with the aim of transforming its shops into "cultural department stores."

"Last year market a major transition for Indigo," said chief financial officer Jim McGill. "The good news is the platform is stablized."

Late last month, Indigo said it turned the page with a solid jump in sales and improved efficiency which helped trim its losses by 26 per cent in the first-quarter of fiscal 2006.

Its net loss for the period ended July 2 totalled $8.1 million or 34 cents a share compared with a loss of just under $11 million or 46 cents a share for the same period last year.

Quarterly sales rose to $164.2 million from $155.9 million, a gain of 5.3 per cent. Those results did not include sales of the sixth instalment of J.K. Rowling's wildly popular Harry Potter franchise, Harry Potter and the Half-Blood Prince, executives said. Following its summer release, the company booked sales of 250,000 units per day.

Looking forward, Reisman said executives are thumbing through a catalogue of growth initiatives for both its store-based and online segments. Among them is an expansion of its "bibliotherapy" book line which includes doctor-recommended picks on a wide array of health issues.

"Bibliotherapy has become a very hot topic in the medical world," Reisman said. "We see this as an area for great growth."

She conceded, however, the industry remains in transition with traditional book retailers forced to contend with the impact of digitization, the Internet and new entertainment technology. For its part, Indigo has introduced a small range of digital products, including the faddy iPod MP3 player by Apple.

"We have to be aware of what opportunities are created by that," Reisman said, but declined to elaborate when pressed. "We're in a highly competitive industry."

The Toronto-based company controlled by Toronto power couple Reisman and her husband Gerry Schwartz, chairman of Onex Corp., operates bookstores in all provinces under the names Indigo Books Music & more, Chapters, The World's Biggest Bookstore and Coles.

The company, which had 6,300 employees at the end of its 2004 fiscal year, also operates Chapters.indigo.ca, an online retailer of books, gifts, music, videos, and DVDs.

Its shares (TSX:IDG - news) fell 20 cents to $8.05 on the Toronto Stock Exchange.