Chapters-Indigo defaults on paying publishers over 60 invoices

by Paul Chen

	An Indigo Bookstore in Toronto.

Philip Cercone, director of McGill-Queen's University Press, had reported in a 2001 edition of the McGill Reporter cited "a long, 10-month nightmare for publishers because Chapters hasn't been paying for their books." Mr. Cercone also remarked on "the real problem now for publishers and authors is that Chapters is returning books by the truckful."

"Many publishers had more returns than sales with Chapters and hundreds are teetering on the brink. Furthermore, many of the returned books can't be resold because they're too damaged thanks, in part, to all the lingering and coffee-drinking while potential buyers peruse their books", added Mr. Cercone.

The editorial staff of The Canadian has learned than Indigo-Chapters, has defaulted on over 60 invoices so far in 2007 alone. When these publishers sought to make complaints about these defaulted invoices, an apparently very rude Indigo official threatened to legal action.

Chapters store in Victoria.

It appears that Indigo is trying to prevent Canadian and other international publishers from being aware of the apparent numerous defaults on invoices. The same apparently rude official from Indigo deleted the account of one publishing consortium, that had notified other publishers about the numerous defaults. "The action of Indigo testifies to the overall harmful effect of that company's quasi-monopolistic behaviour on the Canadian publishing and book trade sector," says Peter Tremblay, who is a representative of that publishing consortium.

Many of Stoddart Publishing problems, for example, "can be traced to his business relations with Chapters prior to its merger with Indigo. With Chapters representing 50 per cent of GDS bookstore sales, what seemed a promising business relationship for GDS quickly turned into a nightmare of late payments and a massive volume of returns, overtaxing the distribution company's ability to cope", TorStar's Eye Weekly had published in June 2002. Stoddart filed for credit protection in 2002.

"After his company was granted court protection, Stoddart said the root of his current financial predicament was the fact GDS was paying publishers for books sent to Chapters before the book chain had paid GDS, and Chapters often took as long as 250 days to pay GDS for stock."

	Indigo has defaulted on paying over 60 invoices in 2007, so far.

Chapters began in 1996 and was taken-over by Heather Riesman's Indigo chain in 2001/2002. "Historically, Chapters has been a huge buyer (60% of a publishers' sales in some cases) and, unfortunately, a huge returner (50% returns not unheard of) of books," indicates the Canadian Booksellers' Association.

The Canadian Booksellers Association further indicates, "The prevailing opinion is that Chapters has taken advantage of special treatment, and thrown its weight around."

"The sad thing is, Indigo/Chapters has monopolized our bookstore market. What chance has a local author against such an adversary? Canadian mainstream publishers are not interested in you, unless you're someone famous! So too Indigo/Chapters," Lena Jones remarks, who posted her comments to a "Chapters Indigo Consumer Complaints Blog".

Indigo Books and Music Inc. is quick to dismiss any link between its business practices and those of Chapters' former owners. Tracy Nesdoly, a spokesperson for Indigo, had said it concerns her company that people continue to lump the two together, in that way. However, this view is not shared by all institutions that have had dealings with Indigo.

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