Indigo Books & Music Ltd. has reported wider first-quarter losses and declining revenue as the retailer continues to cope with the impacts of the COVID-19 pandemic.
On Thursday, the Toronto-based company reported a net loss of $31.6-million or $1.15 per share in the 13 weeks ended June 27, compared to a net loss of $19.1-million or 69 cents per share in the same period last year.
Like many retailers, Indigo temporary closed all of its stores on March 17 as part of public-health measures designed to curb the spread of the virus. The company also temporarily laid off 5,200 retail staff, the majority of its roughly 6,000 employees. Its stores across the country remained closed for the majority of the quarter. By late June it had reopened all but one of its 182 locations and re-hired 3,030 employees.
The store closures boosted Indigo’s e-commerce revenue, which more than tripled in the 13-week period. Online order volumes surged in the first quarter to levels comparable to its biggest sales period in the holiday season.
While e-commerce sales were extremely healthy, they did not entirely make up for losses at the store level. Indigo’s revenue fell by 35 per cent in the quarter, to $135.1-million.
Indigo also announced on Thursday that it has secured a $25-million interest-free credit line from its controlling shareholder in order to secure its “financial flexibility.” The company closed its new revolving credit facility, provided by a company controlled by Onex Corp. chairman and CEO Gerald Schwartz, who is married to Indigo chief executive officer Heather Reisman.
“Despite the unparalleled challenges we faced in the first quarter, we are extremely pleased with the way our entire organization adapted to the unprecedented demands to both adjust the business and meet the needs of our customers,” Ms. Reisman said in a statement.
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Susan Krashinsky Robertson