B&N is facing a problem similar to that which Chapters-Indigo faced in Canada. They sold Kobo to Rakuten, and while still faced with decreasing book sales, they rejigged their product mix to include higher margin products. The result was a profitable year, despite losses in various areas.
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TORONTO, May 28, 2013 /CNW/ - Indigo Books & Music Inc. (TSX: IDG), Canada's largest book, gift and specialty toy retailer reported full year gross profit $2.7 million higher than last year due to a 2.2% improvement in margin rate. The improvement in margin rate was a result of a shift in product mix to higher margin products, lower sales discounts, fewer markdowns and shipping more product through the Company's distribution center.
Net earnings from continued operations attributable to shareholders of the Company for the year were $4.3 million, compared to a net loss of $27.8 million last year. The improvement in earnings was primarily due to improved margins and no goodwill impairment charges being recognized in fiscal 2013.
Revenue for the fiscal year ended March 30, 2013 was $893 million compared to $934 million last year, a decline of 4.4%. The decline was primarily due to lower physical book and eReader sales. Additionally, the Company operated nine fewer small format stores.
The revenue decline was partially offset by double-digit growth in lifestyle, paper and toy sales and an increase in revenue from the Kobo revenue-sharing agreement due to the growth in digital reading.
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