After general merchandise sales hit a wall, Indigo decides to change its creative direction

Until last year, the company has for several years experienced year-over-year growth of around 20-30% in general merchandise.

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Indigo Books & Music Inc. will rethink its general merchandise strategy as sales have slowed over the past year, the company founder said, but remains confident that this is where the future growth of the company lies. business and not with a return to books.


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“Last year we just hit a wall,” CEO Heather M. Reisman said in a conference call with analysts on Wednesday, a day after the company released its fourth quarter financial results and of the year.

Until last year, the company had for several years experienced about 20 to 30 percent year-over-year growth in general merchandise, she said.

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Partly because of the lack of recent growth, Indigo has decided to change its creative direction and take a new look at how it approaches the category, she said.


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“There is a real need for novelty on an ongoing basis and that is our job,” she said, adding that the company wants to devote its efforts this year to the overall evolution of its general merchandise products. and lifestyle.

The company announced on Tuesday that it has hired Nathan Williams to be its Creative Director starting June 3. Williams co-founded Kinfolk and Ouur magazine, a collection of clothing and home items.

Reisman said it would take a few quarters for its impact to show.

She noted that the future of the company does not lie in returning to the books, which remain the foundation, but in ensuring that the general merchandise category is strong and growing. Once that is established, she said, the company will return to review its US strategy.


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Indigo opened its first US store this past fiscal year in New Jersey.

“It’s going to be okay,” she said. “It doesn’t take him out of the park. “

Traffic in the mall where the store is located has dropped significantly this year, she said, noting that customers who have visited it tend to turn out to be loyal customers.

Margins in the US store are also “much higher” than in Canadian Indigo stores, she said, as the company offers the same prices in both countries.

Indigo believes that the basic direction of its US strategy is correct, she said.

“I say that with respect, given that these numbers are nowhere near where we want them to be,” she said, adding that the company would not be opening any new stores this year.

The comment came a day after Indigo reported a net loss of nearly $ 40 million for its fiscal 2019, which falls far short of analysts’ expectations. The company said the loss was due in part to a Canada Post strike and lower consumer spending in the last quarter.



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