People browse books at an Indigo store in Toronto. The Canadian book retailer has undergone a tumultuous year.Christopher Katsarov/The Globe and Mail
Just over a month after returning to the top job at the company she founded, Heather Reisman is proclaiming her intentions to lead a turnaround at Indigo Books & Music Inc. IDG-T – committing to stay on as chief executive officer for a minimum of three years, and to remain for as long as possible on its board of directors.
During an online question-and-answer session with representatives from the Canadian publishing industry on Monday, Ms. Reisman said she plans to lead “a major transformation process” at the country’s largest bookstore chain, after months of upheaval that included departures of board members and senior executives, a debilitating cyberattack and widening financial losses.
“I’m here for a minimum of three years as CEO. I would expect to remain on the board as long as I’m alive and fully cogent,” Ms. Reisman said during the session. “So I expect to be engaged with this business for a very, very long time.”
Ms. Reisman added that she and her husband Gerry Schwartz – Indigo’s controlling shareholder – have no plans to sell the Toronto-based company, and believe that it should remain Canadian-owned.
“Not only do we have no intention of selling it; we intend to invest in the business,” Ms. Reisman said. “I can tell you I am committed; your two major shareholders are committed. That’s why I’m here.”
Ms. Reisman’s remarks follow a turbulent year for Indigo, sparking significant concerns across the Canadian publishing industry, which relies heavily on the retailer to fuel book sales. In February, the company was the victim of a hack that took down its website and other sales functions, compromised sensitive employee information and led to financial losses.
In June, nearly half of the company’s board of directors resigned, and Indigo acknowledged in a news release that one director had cited “mistreatment” as a reason for her departure. The same day, the company announced Ms. Reisman would retire as executive chair of the board on Aug. 22.
Indigo, which has lost money in four of the past five years, reported in July that its losses widened to nearly $50-million in its 2023 fiscal year, which ended April 1. Then, in early September, Indigo announced the departure of CEO Peter Ruis after just one year in the job. Shortly after, Ms. Reisman returned as CEO.
Since her return, Ms. Reisman has said that Mr. Ruis was responsible for taking Indigo’s brand in a direction that has been counterproductive. During Monday’s online session, Ms. Reisman told the audience that “over the last while, somehow books felt like they were not the heart and soul” of the stores, and that Indigo had strayed from its “mission, which is to inspire reading.” She set a goal that books should be 65 per cent to 70 per cent of Indigo’s sales in future.
That goal represents a shift in Ms. Reisman’s own strategy for Indigo, after years of increasing the emphasis on other products such as home decor and gifts. The last time print products and e-reading combined accounted for 65 per cent or more of Indigo’s sales was in the fiscal year ended March 28, 2015.
In 2020, Ms. Reisman told The Globe and Mail that she intended to continue growing sales of such non-book items, and that a healthy ratio for general merchandise compared with books and other print products would be roughly half and half. In the most recent fiscal year, print products made up 51.9 per cent of Indigo’s revenues, while general merchandise made up 44.1 per cent of sales.
During an interview on BNN Bloomberg earlier this month, Ms. Reisman said that her successor had taken the company “off brand.” As one example, she noted that at one point, vibrators were being sold in the stores. Indigo has previously confirmed, however, that it launched sexual-wellness products – including toys and lubricants – in 2020, during Ms. Reisman’s tenure as CEO and before Mr. Ruis was hired.
Indigo stores are currently changing their approach to merchandising to make books more “central,” Ms. Reisman said during Monday’s session. “I think part of our issue is bringing books overall back to the centre of our dialogue everywhere,” she said. “ … From the second I returned, this was where all of my focus went, and our entire leadership team is now focused on this.”
Amid the upheaval in recent months, Indigo has also been quietly cutting some jobs at its head office in Toronto. It is unclear how many people have been affected by the cuts, which began around June and have continued this month – but jobs have been reduced across the sales, merchandising and information technology departments, and others, according to three former Indigo staffers and two who are currently employed in senior roles at the company. The Globe is not identifying the sources because they are not authorized to discuss the matter publicly. Some of the employees have signed non-disclosure agreements with Indigo in order to receive exit packages and other benefits or outplacement services.
In an e-mailed statement, Indigo spokesperson Melissa Perri said “there have not been any material job cuts this fiscal year.” Ms. Perri did not specify the number of jobs terminated so far. Indigo relies heavily on contract labour at the company’s headquarters and, in some cases, jobs have been terminated when Indigo opted not to extend some of those contracts this summer and fall, according to sources who spoke to The Globe.
Ahead of the holiday shopping season, which is a significant source of revenue for retailers and the time when Indigo makes the bulk of its money each year, several Indigo employees have been told by their managers to work with fewer resources and be prepared for more cuts, the sources said.
This summer, Trilogy Retail Holdings Inc., a company controlled by Mr. Schwartz, provided a $45-million credit facility to finance Indigo’s “seasonal working capital and operational needs,” according to a company statement.
“We are on a major, major initiative,” Ms. Reisman said during Monday’s session, in response to a question about reducing overhead expenses at Indigo. “ … We have already kicked off – we kicked it off one week after I returned – a major transformation process. … You won’t see the numbers for the next couple of quarters. The bottom-line numbers will not look like they should. But this is why we put the financing in place, to ensure we not only move through that, but we get way beyond it.”