The foundation helps elementary schools that are in need of books and other learning materials, all across Canada. While providing high quality products and developing lasting relationships with customers, Indigo has also put a focus on giving back to the community through their own foundation: Indigo Love of Reading. This strategy has proven to be successful as general merchandise is growing, and will eventually be more important to the business than the sale of physical books. Aside from testing out concept stores, the company was able to expand their online website, optimize their loyalty programs, and increase the variety of products offered. Essentially, a cultural department store is one which offers a cross section of shops, within a single shop. Physical books accounts for more than half of Indigo's business, so in order to keep up with the new trend, the company implemented a transformation strategy to shift certain aspects of the business away from physical books, and to open up the world's first cultural department store. Due to the technological shift, demand for physical books has declined as consumers are moving towards online shopping and eReaders. They sell their products both in-store, and through their online website. Indigo is Canada's largest book, gift and specialty toy retailer, operating in all 10 provinces and 1 territory. We recommend a Buy rating for Indigo Books & Music, with a target price of $20.10īusiness Overview/Fundamentals The Company The possible expansion into new markets, growing general merchandise sales, and in-store experience Indigo provides, are just some of the reasons to be excited about Indigo's future. The DCF has implied a value of $20.72, well above the current trading price. The valuation of Indigo Books & Music was done by using a comparable analysis, and a discounted cash flow. This unique in-store experience will enable them to succeed in the US, as they explore a possible expansion. While parents shop or simply want to read a book in the in-store café, kids can enjoy themselves in a play area. Their superstores in particular, aren't just a place to shop, they offer an experience for people of all ages. In this new era of online shopping, Indigo has consistently grown brick and mortar sales, while operating fewer stores. Indigo Transformation has Revived its Slowing GrowĪlthough it is much more convenient to click "add to cart" and have your favourite book or toy delivered to your doorstep, Indigo has proven that they provide an in-store experience like none other, warranting a visit to the store by customers. There are 88 large-format stores operating under the banner "Chapters" or "Indigo" and an additional 123 stores operating under the banners Coles, Indigospirit, SmithBooks, and The Book Company. Their products are sold in stores that operate all across Canada, and on their online website. They are a Canadian based retailer that sells a variety of products including books, toys, and even home decorations. However, the company as it is known today, Indigo Books & Music, has been in business since 2001, following a merger with Chapters. Indigo ( OTCPK:IDGBF) has been operating in Canada since 1997, as their first store was opened in Burlington, Ontario. All figures shown are in CAD unless otherwise stated.
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