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Indigo president resigns as profits fall in third quarter

After less than a year in the role, Tedford G. Marlow has resigned as president of Indigo Books & Music and resumed a senior position with U.S.-based retailer Urban Outfitters, where he has been named CEO.

The move, reported by U.S. business media last week, was confirmed by Indigo in its third-quarter results, which saw revenues increase slightly for the period ending Dec. 31 (to $353 million) and profits decline (to $24 million, down from $27 million for the same period in 2010). Marlow assumed the role of Indigo president in April, replacing Joel Silver, who now leads Trilogy Growth, an investment firm affiliated with Indigo’s majority shareholder, Trilogy Retail Enterprises.

Marlow’s tenure at Indigo was brief but controversial, at least among members of the book trade. Under his stewardship the retailer introduced a new line of lifestyle products that competed with books for floor space. Behind the scenes, Indigo imposed new terms that many publishers have struggled with, including a 4 per cent co-op surcharge on all books sold through the chain and a shorter turnaround time for returns.

Marlow also oversaw the sale of Indigo’s ebook division, Kobo, to Japanese software firm Rakuten, a deal that netted Indigo $146 million (U.S.) when it closed last month.

In its Q3 report, Indigo reported double digit increases in its gift, lifestyle, and toy lines, as well as marginal revenue increases at its Chapters and Indigo superstores (up 1.8 per cent) and its small-format IndigoSpirit and Coles locations (2.5 per cent). Online sales increased by 9.3 per cent compared to last year.

Indigo CEO Heather Reisman attributed reduced profits to “lower gross margins as a result of increased promotional discounts to drive print sales and increased sales of low margin e-readers.”

She added in a press release: “This margin impact has not yet been offset by expected growth in the gift, lifestyle, and toy businesses. The Company also recorded a $4.0 million non-cash asset impairment charge during the quarter. Excluding this charge, net profit increased $0.7 million.”

  • mon_moe

    I can’t say I’m surprised…  I used to spend on average $250 a month there, but when they introduced their Plum Rewards, it proved a thorn in my side, and I’ve barely shopped there since.  The new reward program resulted in a ridiculous increase in cost of the iRewards card, which I’ve had for 18 of my 26 years, with barely a new benefit to the program (now receiving 5% off gift and lifestyle products, which I generally do not buy there).  I didn’t bother renewing the card when it ran out, and I’ve been getting my books from Amazon and independent stores since.

  • http://twitter.com/rolliwrites Rolli

    Hey! Maybe they can sell books now! That would be so great! It was getting so confusing, man, going to bookstores to buy coffee mugs, and coffee shops to buy CDs, and CD stores to buy books! Oh, man! I can take fewer meds now!

    -Rolli
    http://www.rolliwrites.wordpress.com
    http://www.twitter.com/rolliwrites

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