Revenues for the fiscal year ended March 31 were down by 2.3% for Indigo Books & Music, Canada’s largest book retailer, but buoyed by the C$165 million sale of its digital arm, Kobo, Indigo reported net earnings of C$93 million. Excluding the one-time gain, Indigo had a loss of C$27.8 million in the year from continuing operations.
Revenue for the fiscal year ending on March 31, 2012 was C$934 million compared to $956 million last year.In its year-end report, Indigo attributed the decline to lower physical book sales, partially offset by growth in its digital, gift, lifestyle and toy businesses. Kobo also noted that $7 million in revenues were deferred when Indigo launched its plum rewards loyalty program in April 2011. It expects to realize that revenue in the future as its 4 million members redeem points earned on past purchases.
Same store sales at Indigo and Chapters superstores decreased 1.9%, while comp sales at Coles and IndigoSpirit small format stores fell 0.8%. However, online sales on indigo.ca were up 2.9% compared to last year.
Indigo made a significant strategic shift in the fall, changing its product mix to include more lifestyle products but reducing its inventory of books. CEO Heather Reisman said at the time the move was necessitated by the rising popularity of digital reading. In her year-end comments, she said, “We've accelerated our transformation from a bookstore to the world's first cultural department store and are gratified that our efforts are being positively received by our customers.”
Revenue for the fourth quarter was C$196 million, down C$4 million from the previous year. That drop was also attributed to lower physical book sales partially offset by the growth in the digital business and sales of other products. The loss from continuing operations was C$10.7 million compared to C$11.7 million in last year's fourth quarter though the gain from the Kobo sale resulted in net income of C$125 million in the quarter.