December 3rd, 2020

Indigo, Penguin Random House want Ontario to deem bookstores essential


By Tara Deschamps, The Canadian Press on November 20, 2020.

A sign showing where Indigo plans to open a new store is shown at the Mall at Short Hills in Short Hills, N.J., on July 22, 2018. Penguin Random House Canada is calling on the Ontario government to designate bookstores as an essential service. THE CANADIAN PRESS/Craig Wong

TORONTO – Two of the Canadian literary industry’s biggest brands are calling on the Ontario government to designate bookstores as essential services – even as COVID-19 cases continue to surge.

Retailer Indigo Books & Music Inc. and publisher Penguin Random House Canada both say bookstores should be allowed to remain open as COVID-19 restrictions are tightened because they provide resources that educate and contribute positively to communities and coping with the pandemic.

“A shut down of physical bookstores would have serious consequences on the well-being of Canadians young and old, as well as the livelihood of authors and booksellers, across the country,” Indigo said in a statement to The Canadian Press.

Penguin Random House Canada chief executive Kristin Cochrane echoed those statements in a letter she wrote to Ontario Premier Doug Ford, where she argued that the combination of low margins and high postal and distribution costs mean online sales are not a viable option for most bookstores during the COVID-19 pandemic.

“Online retailers alone do not have the supply chain capacity to service the book business in Ontario without severely underserving many readers and communities, as we saw during the first wave of the pandemic, when books were deprioritized,” she said.

“Nor can the books category be left in the hands of online retailers without serious impact on the reach of Canadian stories, authors, illustrators, and voices – and the long-standing vibrancy and diversity of our retail ecosystem.”

The joint call to designate bookstores essential comes as new daily COVID-19 cases have been hovering well above the 1,000 mark in Ontario for weeks and the province has been teasing further restrictions are to come.

The premier’s office wouldn’t comment on the matter, but spokesperson Ivana Yelich said in an email that it will have more to share at a news conference scheduled for Friday afternoon.

Cochrane is hoping her advice will be acted on by the premier because, she said, Increasing labour costs, rising commercial rents, and competition from online retailers who operate at a scale and with a cost structure that independent and national retailers cannot rival are squeezing booksellers.

Many have long relied on in-person book launches and events to quell some of the impacts on online retailers like Amazon.com Inc., but the pandemic has destroyed that revenue avenue, she said.

While Indigo said its push for essential designation would help independent booksellers and publishers, the company would benefit too.

Being allowed to stay open could offer some relief for Indigo, which has seen decreased foot traffic and sales during the pandemic.

So many people have stayed home and put off purchases that the Toronto-based retailer said it lost $171.3 million or $6.22 per diluted share in its most recent quarter, compared with a loss of $23.8 million or 86 cents per share a year earlier.

Indigo’s same-store sales for online and retail stores, a key metric in the retail sector, fell 7.9 per cent in the quarter.

This report by The Canadian Press was first published Nov. 20, 2020.

Companies in this story: (TSX:IDG)

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