CEO and founder of Indigo Books and Music, Heather Reisman outside its Sherway Gardens location in Toronto on Sept., 10, 2020.Christopher Katsarov/The Globe and Mail
Indigo Books & Music Inc. IDG-T founder Heather Reisman has been reinstated as the company’s chief executive officer, reversing her retirement and filling the gap recently left by the resignation of the book retailer’s CEO and president.
It’s the latest in a year of leadership shakeups following a debilitating cyberattack, the loss of half of its board, allegations of “mistreatment” from a former director and competitive pressures in the industry.
In early September, Indigo announced the departure of CEO and president Peter Ruis after just one year in the role. Andrea Limbardi, Indigo’s president under Mr. Ruis, also left in September to become CEO of Reitmans (Canada) Ltd. This left the book retailer without a CEO and president ahead of the crucial holiday season.
Ms. Reisman returns from retirement as the company faces mounting losses and changing consumer sentiment. Indigo has been losing money for years, and reported a net loss of $50-million for its 2023 fiscal year, ended April 1, partly attributed to lingering effects from a cybersecurity attack last February.
Turmoil in Indigo’s C-suite leaves Canadian publishers reading between the lines
The ransomware attack temporarily knocked the company’s e-commerce operations offline, breached employee data, and hampered the company’s online marketing presence and inventory management.
“There is a clear path for Indigo to regain its momentum,” Ms. Reisman said in a news release Monday morning. “I know that together we will return Indigo to growth and profitability.”
In the aftermath of the attack, Ms. Reisman, who was then serving as executive chair, said she would retire in August. At the same time, four board members left the company. One of the departing directors, Dr. Chika Stacy Oriuwa, said she had experienced “mistreatment” at Indigo and had lost confidence in the board’s leadership.
Ms. Reisman was not available for an interview, and Indigo did not answer The Globe and Mail’s questions about her return and the company’s search for a new president.
Despite the upheaval over the past year, in more than three decades at the helm of the company, Ms. Reisman built a successful brand with “Heather’s Picks” and curated a retail environment that encourages customers to spend time browsing in the store before buying.
Ms. Reisman’s reinstatement will boost consumer confidence in the brand, said Tanya Barzotti, a marketing and consumer studies professor at the University of Guelph’s Gordon S. Lang School of Business and Economics.
“This is particularly important when the economy is heating up and budgets are strained. Consumers will restrict their spending but if they do spend, they will spend their money on brands they trust,” Prof. Barzotti said.
And HarperCollins Canada spokesperson Cory Beatty said the publisher is optimistic that Ms. Reisman’s reinstatement will be a “great win for the industry.”
In response to the announcement of Ms. Reisman’s return, Indigo’s shares on the Toronto Stock Exchange rose 23.7 per cent Monday, closing at $1.67 – the biggest price surge this year.
Markus Giesler, a marketing professor at York University’s Schulich School of Business, said that Ms. Reisman’s return could suggest the company is trying to return to familiarity amid “chaos below the surface.”
While the carousel of executive changes in quick succession may have undermined investor confidence in recent months, he said, Ms. Reisman’s long-time involvement and deep knowledge of the business “might be exactly the kind of stabilizing force that the company needs at this time.”
Indeed, Indigo still faces challenges. The company is navigating the strain of a consumer base pinched by inflation, which is also turning more frequently to digital book and media options.
Prof. Barzotti said the company must reassess where and how consumers want to shop, including their ever increasing interest in digital entertainment: audio and e-books, virtual games and social media.
“I’m not sure there is time for change before the holiday season, but I would anticipate major changes to the Indigo stores in the very near future,” Prof. Barzotti said.
Indigo has increasingly shifted to selling general goods, and has expanded its product lines to include more home items, lifestyle products and clothing. From 2014 to 2023, the company’s share of revenue from non-book goods rose from 26.5 per cent to 44.1 per cent, according to Indigo’s annual reports.
The shift has left Canadian publishers concerned about the future of the domestic book industry.
Indigo also announced several other management changes Monday morning.
Craig Loudon, the company’s chief financial officer and “day-to-day” leader over the past month, has now also been appointed chief operating officer. He will act in both roles.
Eileen Naughton, formerly the chief people officer at Google Inc., will join the board. Markus Dohle, chair of the board’s human resources, compensation and governance committee, has been appointed as company chair.