Indigo at Burnaby’s Metropolis at Metrotown part of $31M cash meltdown

With people forced to stay home in Burnaby due to the COVID-19 pandemic, many said they were turning to reading more books.

But the height of the pandemic meant book shops were closed for long periods of time.

That has been felt as Indigo Books & Music Inc., which operates a huge store in Burnaby’s biggest mall, Metropolis at Metrotown, reported a larger net loss and a nearly 30 per cent drop in revenue in its most recent quarter.

Canadian customers likely won't start frequenting stores for items not on their shopping list until there's a vaccine for COVID-19, Indigo Books & Music Inc. founder and chief executive said Friday.

"I think our own view is that customers will continue well, well into the months ahead to make shopping an activity they do when they have something specific to buy," Heather Reisman said during a conference call with analysts. The company released its first-quarter financial results after markets closed Thursday.

Foot traffic is "still way down" for the book retailer, which shuttered all its stores to help stop the spread of the coronavirus and only reopened nearly all 182 of its locations by the end of its most recent quarter.

The book retailer recorded a net loss of about $31.6 million for the 13 weeks ended June 27 compared to a net loss of about $19.1 million in the same quarter the previous year.

That amounts to a loss of $1.15 per common share for the first quarter compared to a loss of 69 cents per share in 2019.

The Toronto-based company's revenue fell to $135.1 million from $192.6 million as its stores were closed for the majority of the first quarter due to COVID-19.

With stores closed, the retailer's online revenue jumped 214 per cent compared to the same time the previous year.

The company says it reduced discretionary spending and its workforce during the quarter, and closed on a $25-million, interest-free revolving credit facility this month from a company controlled by Gerald Schwartz, a controlling shareholder of Indigo.

- With files from the Canadian Press

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