Rex Krueger
Published 1 Nov 2024The new platform for buying and selling woodworking tools.
Use the code: STARTNOW to save $5 off ANY first purchase.
To celebrate our launch, we’re running No Fee November! For the entire month of November, sell unlimited tools. NO MARKETPLACE FEES!
November 2, 2024
I’m only buying tools HERE
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October 1, 2024
The pros and cons of living the digital life
Spaceman Spiff considers how much of modern western life is now being experienced online rather than in the real world and what are the trade-offs inherent in the switch to the life digital:
Life is what you pay attention to. Increasingly many of us are immersing into virtual worlds and spending less time out in the real world. We are attending to digital realms.
Everything it seems is going online, from shopping to entertainment to work. Almost no aspect of life remains untouched by the slow creep of technology.
Our entertainment is digital and our social networks are found online. For increasing numbers this may be their only connection to others.
Even work is becoming unavoidably remote with Zoom and comparable tools now standard fare.
The digitization of life continues apace. As a result, we are present in the real world less and less and this cannot be altogether healthy.
Many benefits
There are obvious benefits to our new digital world.
Thanks to the internet much has become convenient and easy. We can access a wide array of goods and have them delivered for a small fee.
The scale of the options is impossible to beat. The real world could not possibly provide the options on display. We can peruse virtual warehouses with everything. No bookstore is as big as Amazon.
The post-Covid world accelerated aspects of digital adoption, particularly video-based conferencing and other virtual tools. This is now ubiquitous, particularly in work settings.
One-click ordering and fast delivery makes everything else seem unreasonably tedious and complicated. It is a hassle going to a physical location to buy clothes or books or food when you can pay a slave to deliver it.
But people sense they lose something with digital tools even when it is convenient to not travel or leave home. It is not the same as face to face. Importantly it brings the world into our homes, so we cannot easily escape.
Other less visible changes are apparent too. We seem to socialize less. We go out less often.
We dine in and often by having unhealthy food delivered, all chosen and prepared by others. The appeal of going out and mixing with strangers is waning.
Behind this is a gradual bureaucratization of everything as we are continually reminded of external dangers; germs, extreme weather, domestic terrorism, none of which are likely to ever touch us but we are told are ever present. These require interventions we never get to vote on but affect us nonetheless.
The safety-obsessed post-Covid world wants you at home where you are safe and sound. Digital tools have proliferated to serve this need.
But of course, for all the benefits we can enjoy for living the internet lifestyle, there are also significant negatives …
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September 2, 2024
There’s no limit to how progressive politicians want to control your life
In the National Post a couple of days ago, Carson Jerema provided many examples of how the Canadian federal government — despite failing and fumbling so many of its existing responsibilities — still wants to increase control over the daily lives of Canadians:
After a decade or so, progressives are on the defensive in Canada and elsewhere because regular people, as in those who are not activist weirdos, are tired of the agenda to control every aspect of our lives. Point this out to a progressive, and they will deny that anyone’s life is being interfered with and claim only some far-right monster would think otherwise. They can’t believe there are people out there who share a different view. They don’t understand how this could be.
But progressive governments are trying to control our lives in ways big and small, and in ways that range from subtle to a punch in the face.
In Canada, the federal government’s environmental policies are the most obvious example of this interference. The Liberals have banned plastic straws and plastic bags; even compostable bags are banned in grocery stores because they resemble plastic. Such bans are pointless irritants that make shopping more expensive, and life slightly less enjoyable as paper straws dissolve in one’s drink. People might dismiss these concerns as simply minor inconveniences, but this is how most people experience government policy, by being forced to replace their bag of plastic bags that they were already reusing, with more expensive, less useful options.
Next up, the Liberals are exploring options to bring in environmental regulations for clothing. The cost of clothes has actually gone down in recent years, so leave it to Ottawa to look for ways to bring the cost back up and to limit options.
There is also the plan to essentially force Canadians to purchase electric vehicles, that nobody would otherwise want, through government mandates to phase out the sale of gas-powered cars and trucks.
On a larger scale, the government is attempting to restrict the kind of work people do, specifically work in the oil and gas industry, through steep emissions targets, which will close off lucrative job opportunities in western oilfields. It will also limit the kinds of fuels people will be able to use to heat their homes.
There are also policies that the Canadian government hasn’t implemented, but which green activists have endorsed, such as the banning of gas stoves and the ludicrous suggestion from some academics that “climate lockdowns” be implemented to help cut emissions.
It is possible to be supportive of all these policies, despite their paternalistic and job-killing nature, but pretending that no one is trying to, or that no one wants to, interfere with our liberty is not a credible position to take.
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September 1, 2024
The supermarket master plan to defeat the “far right” in Germany
There are elections ongoing in the German states of Thüringen and Saxony, and the polls show that the “far right” Alternative für Deutschland is potentially going to get 30% of the votes, which would give them more representation in those states than any of the other parties. Panic and hysteria have set in not only among the politicos and the mainstream media, but even among some businesses:
In Germany, all political parties have a colour. The Christian Democratic Union and the Christian Social Union are black, the Social Democratic Party is red, the liberal Free Democratic Party are yellow and the evil fascist Alternative für Deutschland are blue. This coming Sunday, Thüringen and Saxony will hold state elections, and the blue AfD are leading the polls in both states with about 30% support. This has a lot of people very, very upset. Most of them are merely upset with the AfD, but some psychologically unstable people have allowed their anger to embrace the colour blue more generally, because there can be no limits when it comes to resisting the evil antidemocratic forces of fascism.
Among the new sworn enemies of the blue band of the visible electromagnetic spectrum are the marketing team at Germany’s largest supermarket corporation, the Edeka Group. A few days ago, this supermarket chain, whose own logo strangely enough is primarily blue …
… ran an ad in Die Zeit and the Frankfurter Allgemeine Zeitung explaining “WHY BLUE IS NOT ON OFFER AT EDEKA”.
That wall of text in the middle reads as follows:
Yellow bananas, red tomatoes, green lettuce, purple grapes, orange carrots, pink dragon fruit … EDEKA’s fruit and vegetable department is full of colourful diversity. Or is it?
If you look closely, there’s one colour you won’t see: blue. And that’s no coincidence. Because blue food is nature’s way of warning us: ‘Watch out! I could be harmful!”
Evolution has taught us that blue is not a good choice.
And speaking of choices: Blue is not only the natural enemy of a healthy diversity of fruit and vegetables. In Germany, “the blues” are also the biggest threat to our diverse society.
So let’s read the warning signs correctly ahead of the state elections in Saxony, Thüringen and Brandenburg in September – and ensure that we can live together in harmony. Because we love diversity.
For those wondering whether Edeka have decided to cease selling fascist blue fruits like blueberries, there is a helpful note down in the corner:
There we learn that, while “‘Blueberries’ or ‘Blue cabbage'” may have “‘blue’ in their names”, their “colour pigments” are not blue. This is “at least what Science tells us – and as we know you should always listen to Science more”. Nothing about this is remotely obnoxious; indeed, if current-year Germany needs anything, it is more blind platitudinous calls to Follow the Science – particularly when it comes to exonerating innocent fruits and vegetables from suspicion of blue fascism.
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August 12, 2024
“Premier Doug Ford’s plans for the demon liquor will lead us all to untold poverty and perdition”
In the National Post, Chris Selley points and laughs at the classist viewing-with-alarm and frenzied pearl-clutching over the impending rule change that will allow wine and beer to be sold (and even served) in convenience stores like the 7-Eleven chain:
The plight of poverty-stricken Ontarians, forced to get drunk at their local 7-Eleven dive bar.
Gin Lane, from Beer Street and Gin Lane via Wikimedia Commons.
Ontario politics in recent weeks has played out as something like a real-time satire of itself, with the Latent Methodist Brigade still insisting Premier Doug Ford’s plans for the demon liquor will lead us all to untold poverty and perdition. The news this week has only made them more upset: Japanese convenience store empire 7-Eleven will open licensed areas in 58 of its 59 stores in Ontario, in which you can enjoy an alcoholic drink with your hot dog, nachos or chicken nuggets. The company says it’ll add 60 jobs.
Fifty-eight is not a large number, you will agree, in a province with many thousands of licensed premises, any of which might get you drunk and send you back out to your car or boat (though of course they shouldn’t). Some of those thousands of licensed premises are even attached to gas stations, I can report. And many gas-station convenience stores in Ontario sell beer, wine and liquor as independently run “LCBO agency stores”.
For the record, 7-Eleven announced they were doing this way back in December 2022. Pro-forma neo-puritan controversy ensued, and quickly died down. Two 7-Elevens already operate as licensed restaurants in Ontario, apparently without incident, along with 19 in Alberta. (Unfortunately, bien-pensant Ontarians are trained from birth to believe Alberta’s liquor-retail reforms in the 1990s were a grotesque misadventure that everyone there regrets.)
Nevertheless, the same pro-forma neo-puritan freakout is playing out again.
“Let me get this straight. 7-Eleven locations where people fuel up their cars will now allow folks to drink on the premises? What could possibly go wrong?” sneered JP Hornick, president of the Ontario Public Service Employees’ Union (OPSEU), who was last seen dragging LCBO employees into a disastrous tantrum-cum-strike over expanding retail access.
“We need a government that will focus on real things including bringing down hospital wait times, fixing schools and tackling the housing crisis as their signature achievements, amongst many more,” Toronto Coun. Josh Matlow correctly averred on Twitter … and then, as is the fashion here, went full non-sequitur: “Doug Ford made sure we could drink coolers inside a 7-Eleven.” As if the government decided it could only pick one.
(And can I just say here, any Toronto city councillor complaining about another politician’s lack of “signature achievements” is on bloody thin ice.)
Every fully paid-up member of the Laurentian Elite [Spit!] believes with all their flinty hearts that Alberta is a barren wasteland of ruined lives thanks to the demon liquor being sold in corner stores. Initial issues from a generation ago are firmly ensconced as “the way it is” with liberalized booze access out there in the wild west.
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May 29, 2024
Ontario’s long and winding (and subsidy-strewn) road to beer in convenience stores
Apparently I’ll have a little bit more to celebrate on my birthday this year as the Ontario government’s glacially slow-to-change alcohol sales rules are being liberalized as of September 5th to allow all the province’s convenience stores to begin selling beer and wine:
“The Beer Store” by Like_the_Grand_Canyon is licensed under CC BY-NC 2.0
Premier Doug Ford promised Ontarians beer in corner stores, supermarkets and big-box stores, and by God he has delivered. As of Sept. 5, all Ontario convenience stores meeting eligibility criteria will be allowed to sell beer, wine, cider and pre-mixed drinks. As of Oct. 31, the privilege will be extended to all grocery and big-box stores. The province says it expects as many as 8,500 new booze-procurement sites to come online under the new regime. By Ontario standards, it’s absolutely revolutionary.
The new regime is also, of course, hilariously complicated. And absurdly, offensively expensive.
It is fair to describe the new regime as somewhat more competitive, and certainly more convenient. In addition to offering potentially thousands of new locations, supermarkets (including the roughly 450 already licensed) will be able to offer volume discounts on beer — i.e., a 24-pack will cost less per bottle than a six-pack. This was a privilege hitherto reserved for The Beer Store, the American-, Belgian- and Japanese-owned conglomerate that dominated beer sales in Ontario from the end of Prohibition until fairly recently.
Private retailers will even be able to set their own prices, which until now has been considered blasphemy.
It is not fair to describe the new regime, as the government does, as an “open” market.
Near as I can tell, Ontario will by 2026 have the following retail environments in place:
- The Beer Store. Smelly, surly, and the best-available value. Only beer — no cider or mixed drinks. It’s in the name.
- LCBO locations. Government-run liquor stores retain their near-absolute monopoly on hard liquor sales, in addition to selling beer (especially craft beer, in which The Beer Store’s owners aren’t so interested), wine and everything else.
- LCBO- and/or The Beer Store-branded “agency stores” in rural areas, which sell everything the LCBO does, but operate inside of convenience stores, small supermarkets and other local businesses, and are staffed by non-government employees.
- The existing supermarkets licensed to sell beer, cider and wine (and in rare cases all three!), plus scores of new outlets — the new 8,500 new locations.
The Beer Store maintains a monopoly (in urban areas) on wholesale for bars and restaurants and on refunding cans and bottles, although its new “master framework agreement” (MFA) doesn’t even oblige it to maintain its current number of locations — which in urban areas have been dwindling rapidly. I’m a 17-minute walk from my nearest Beer Store. The house I grew up in, in the heart of midtown Toronto, is a 45-minute walk. I’m not schlepping a leaky garbage bag full of empty cans either distance.
April 10, 2024
We can expect to see a lot more commercial bankruptcies in future
Although Tim Worstall is talking specifically about commercial properties in the UK, I suspect the same basic mechanism is in place here in Canada, the US, and many other countries and the outcomes will be broadly similar: declining retail sales intersecting with rising rents do not result in healthy retail markets.
The specific point is something that has become common to near universal in commercial property leases in the decades since the War. This is that rents can only ever be revised upwards.
So, the standard thing about commercial property is that it’s not so much rented as leased. The difference is not wholly clear but, roughly enough, you can leave a rental and you can’t leave a lease. That is, if you’ve a 21 year lease and you want to leave before the 21 years are up then it’s up to you to find another tenant. Not the landlord — and if that tenant that you do find then leaves/goes bust/doesn’t pay the rent then you have to. At least a rental you can leave.
OK — but that’s all pretty standard. The UK has one more thing. Obviously, there are rent reviews during the period of the lease. Inflation taught landlords that this was something they needed to do after all. OK — but the standard, and it really is standard in UK commercial leases, rent review is upwards only. Now, for most of this past 70 years this hasn’t been a problem. The country has been getting richer, inflation has persisted, retail’s been ever more of the economy, rents have been going up.
Ah, but now, eh? Firstly, we’ve the internet eating retail.
About, and roughly, 1% of the total market each year moves online. We all thought that the lockdown boom was going to persist and it didn’t. This caused all sorts of problems for all sorts of people — Boohoo ended up terribly overstocked. Made.com was able to come to market and then went bust as the right hand end of that chart happened and we returned to trend after the blip. Revolution Beauty had its own problems but the overvaluation was at least partly to do with this and so on.
But this had already been happening — Intu went bust well before the pandemic, as we know. It’s now about true that 15% or more of UK retail space is empty. Because sales are moving online. This — naturally enough — means that prices, rents, of retail are falling. Well, OK.
But now this meets upwards-only rent reviews. If you’re a new retailer looking for space then the High Streets are your mollusc of choice. You can probably get in on low rents, substantial rent-free periods and even get the landlord to pay your fitting out costs (landlords would much rather give rent-free periods, pay costs of moving in, than let at low rents. Because the terms of their own mortgages and loans make it better for them to keep headline rents stable whatever the hell the truth of the real value is). But if you’re a long established retailer paying high street rents then you’re screwed.
Your new competition might be able to get in by paying half the rent you are. And yes, rent is a really, really, big part of retail in the UK. You are, in fact, fucked and right royally.
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November 21, 2023
“Self-checkouts are not quite Skynet T-800 death dealers. Sarah Connor can rest easy – for now”
I realize the problem is me, in that I hate self-checkout kiosks with a fiery passion and have been known to abandon any plans to purchase from a store if there is no human assigned to the checkout desk. I decline (with thanks) all offers to use the self-checkout — several of which are often unused — while lined up three or four deep at the one human’s work station. It must be my Luddite side showing. But, as Christopher Gage shows here, I’m not completely alone:
Self-checkout using NCR Fastlane machines at a Sainsbury’s store in the UK.
Photo by Magnus Manske via Wikimedia Commons.
“He’s got a problem with potatoes,” said the condemned, guarding the self-checkout machines. Potatoes plague them. Carrier bags flummox them. ‘Surprising item on the scale,’ it squeaked as if I were weighing up a kilo of black-tar heroin.
The retirement refusenik tapped a code on the screen for the third occasion before returning to his post. ‘Unexpected item in the bagging area.’ Embarrassed, I marshalled my friend — the Hobbity, amenable man with the silver slugs for eyebrows — for the fourth time. He recanted a well-worn sop dispensed to young dotards like me: “Don’t take it personally,” he said. “He just doesn’t like you.”
Self-checkouts are not quite Skynet T-800 death dealers. Sarah Connor can rest easy — for now.
After a little while, the machine let me go. The ordeal, fractious and infinitely slower than employing the helpful man to man a till, was over. Then, the devil-device sucker-punched square in the testes.
“Lovely to see you bye for now,” read the screen. Sinister, like a Jehovah’s Witness grinning. No comma after the introductory clause?! The insolent swine. I fought the primal urge to drown the machine in Coca-Cola and watch it crackle. The clean-up would be Harold’s job. He had enough on his plate.
Mercifully, one supermarket has sacked these silly machines.
Booths, a posh retailer up north, has retired self-checkouts in all but two of their stores. The good burghers of Booths reckon humans talking to other humans is a groundbreaking idea that will catch on in future.
“We have based this not only on what we feel is the right thing to do but also from having received feedback from our customers,” they said.
“Delighting customers with our warm northern welcome is part of our DNA.”
Wearily, Booths did what British northerners must do lest they spontaneously combust — they peacocked their northernness. Apparently, to be born on a particular patch of this floating rock bestows northerners an umbilical, friendly mien.
Northerners cannot help themselves. POV: You encounter a northerner in a pub: “A malignant tumour, you say? You wanna get yourself a northern tumour. Northern tumours are far less aggressive than those bloody southern tumours. It’s a fact! Northern tumours still have a sense of community, you see. Not like southern tumours …”
I must forgive them. Booth’s “northern welcome” is a good thing. Entities imbued with DNA are a good thing. Even one fewer self-service checkout is a good thing.
From where Booth’s tread, others may follow. The numbers don’t tell fibs.
Self-checkouts mutate even the most cherubic of citizens into a degenerate thief. Stores with self-service checkouts suffer double the shrinkage (4%) — industry-speak for pilfering and thieving.
Researchers say the temptation can prove too much, provoking our inner tea leaf into a spot of half-inching. Self-checkouts goad miscreants into slapping a “Reduced to £1” sticker on a litre of Jameson.
Booths have bucked a trend. A fatuous, anti-human trend.
Update: Fixed broken URL.
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September 24, 2023
A sliver of hope for Indigo?
In the latest SHuSH newsletter, Ken Whyte relays some new-ish rumours in the book business that may provide a bit of help for the struggling Indigo chain:
“Indigo Books and Music” by Open Grid Scheduler / Grid Engine is licensed under CC0 1.0
So what do we make of Heather Reisman’s return as CEO of the Indigo bookselling chain after her unceremonious removal from that role just two months ago?
The short answer is I have no idea, but SHuSH has never shied away from delivering irresponsible speculation on happenings at Indigo. I heard this week from a reasonably reliable source that Indigo is in discussions with Elliott Management Corp., owners of Barnes & Noble and the world’s only buyer of distressed bookselling chains.
This conflicts with some chatter I reported last spring suggesting that Elliott Management was uninterested in Indigo. If what I’m now hearing is true, it’s great news.
I have to emphasize, I have no idea. But if a deal were imminent, it would make sense to bring Heather back to see it through. Indigo wouldn’t want the bother of recruiting a new leader simply to effect the handover, and who would want the job on those terms?
And another thing …
In last week’s piece about Indigo, I noted that the company’s staff, “with exceptions, were young, inexpert, and disinterested”. Amal, clearly one of the exceptions, left an interesting comment:
No. We became disinterested simply because a) we were all book lovers and had zero interest in selling crap and b) just like the author of this piece, head office and management were beyond dismissive of our knowledge, our book expertise, our genuine love of the written word. I worked at Chapters/Indigo starting in 2006 all the way until 2019, a couple of days a week, simply for my love of books. I am incredibly proud of my time there — especially when I was able to introduce new authors or genres to readers. My staff picks would sell out because I would hand sell them to people with my joy. It certainly wasn’t for the stellar pay or the people who treat retail employees like we are “inexpert”. Fun fact: you were asked in the job interview what your favourite books/genres were.
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September 20, 2023
How the feds could lower grocery prices without browbeating CEOs
Jesse Kline has some advice for Prime Minister Jagmeet Singh Justin Trudeau on things his government could easily do to lower retail prices Canadians face on their trips to the grocery store:
CBC report on federal scapegoating of grocery chain CEOs.
https://www.cbc.ca/news/politics/government-grocery-store-meeting-ottawa-food-prices-1.6967978
What exactly the grocery executives are supposed to do to bring down prices that are largely out of their control is anyone’s guess. Do they decrease their profit margins even further, thereby driving independent retailers out of business and shedding jobs by increasing their reliance on automation? Do they stop selling high-priced name-brand products, thus decreasing their average prices while driving up profits through the sale of house-brand products?
If the government were serious about working with grocers, rather than casting them as villains in a piece of performative policy theatre, here are a number of policies the supermarket CEOs should propose that would have a meaningful effect on food prices throughout the country.
End supply management
Why do Canadians pay an average of $2.81 for a litre of milk — among the highest in the world — when our neighbours to the south can fill their cereal bowls for half the cost? Because a government-mandated cartel controls the production of dairy products in this country, while the state limits foreign competition through exorbitantly high tariffs on imports.The same, of course, is true of our egg and poultry industries. Altogether, it’s estimated that supply managements adds between $426 and $697 a year to the average Canadian household’s grocery bill. It’s not a direct cause of inflation, but it’s a policy that, if done away with, could save Canadians up to $700 a year in fairly short order.
Yet not only have politicians been unwilling to address it, they have been fighting some of our closest trading partners to ensure that foreign food products don’t enter the Canadian market and drive down prices. Ditching supply management would be a no-brainer, if anyone in Ottawa was willing to use their brain.
Reduce regulations
The best way to decrease prices in any market is to foster competition. As the Competition Bureau noted in a report released in June, “Canada’s grocery industry is concentrated” and “tough to break into”. Worse still, “In recent years, industry concentration has increased”.So why don’t more foreign discount grocery chains set up shop here? Perhaps it’s because they know our national policy encourages Canadian-owned oligopolies. While grocery retailers don’t face the same foreign-ownership restrictions as airlines or telecoms, the products they sell are heavily regulated, which acts as a barrier to bringing in cheaper goods from other countries.
Although it wasn’t the primary reason for the lack of foreign competition, the Competition Bureau did note that, “Laws requiring bilingual labels on packaged foods can be a difficult additional cost for international grocers to take on”.
Other ways the federal government could help Canadians afford their grocery bills include:
- Jail thieves
- Stop port strikes
- Don’t tax beer
- Axe the carbon tax
Don’t hold your breath for any of these ideas to be taken up by Trudeau’s Liberals.
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September 17, 2023
Why Indigo’s struggles are far from over
Following up from last week, in this week’s SHuSH newsletter Ken Whyte explains why Indigo went in the direction it chose and why it seemed like the thing to do at that time:
“Indigo Books and Music” by Open Grid Scheduler / Grid Engine is licensed under CC0 1.0
Bookselling is a difficult business and it’s been especially difficult over the last twenty years. The Internet captured a lot of the used book business and shifted it online. Amazon captured a lot of the new book business and shifted it online (and bought Abebooks.com, one of the largest used book sites).
Former Indigo CEO Heather Reisman tried and failed to convince the federal government to keep Amazon south of the border back around 2002. She went so far as to sue the feds on the grounds that Amazon, as a cultural entity, was not majority-owned by Canadians and therefore operating in contravention of the Investment Canada Act. The suit went nowhere because Amazon then had no physical presence in Canada; it operated primarily through Canada Post. By the time Amazon did announce its intention to build a warehouse north of the border, early in 2010, the government had given up enforcing the Investment Canada Act. It was happy to have Amazon create new jobs.
It was when Amazon opened its Canadian warehouse that Heather began backing Indigo out of the book business. She cursed Amazon for its anticompetitive practices, not least its habit of selling books below cost to destroy competitors, and adopted the term “cultural department store” as a pivot from bookstores.
I’ve made it clear in newsletter after newsletter that I don’t like the direction Heather took Indigo but it’s only fair to look back at prevailing circumstances in 2010 and wonder if she really had a choice.
I’m sure she had stacks of research and hordes of people telling her that abandoning books was the only move. Attempting to compete with Amazon’s enormous scale and superior logistics would have struck many as a fool’s errand. Amazon would always have the largest selection, the best price, and the fastest delivery.
There was also a widespread belief that print was dead. E-books, e-readers, and tablets were the future, along with the “one very, very, very large single text“. Global e-reader sales were growing like this:
They were expected to keep growing. So were sales of e-books. In 2012, the Financial Post quoted data from Indigo predicting that e-books would capture 50 percent of the market in five years.
So, having played the Canadian Nationalist card and discovering that the government was willing to bluster but not to meaningfully act, Heather Reisman took the advice of her consultants and diversified away from books and into all the utter crap that currently befoul at least half of the retail space in every Indigo store. After all, the big box bookstores in the United States were clearly failing in the face of Amazon, with Borders filing for bankruptcy and Barnes & Noble staggering in the same direction. From 1999 to 2019, fully half of all the bookstores in the country disappeared.
The story isn’t as bleak as it looked in 2019, as Barnes & Noble is staging quite a comeback by concentrating on the book business. It’s a radical move, but Indigo could do far worse than cooking up a maple-flavoured version of the Barnes & Noble strategy. It might fail, but they’ll definitely fail if they keep on pretending to be a department gift store that also has a few books.
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September 14, 2023
QotD: Going to “the mall”
“How was the mall?” Mom would ask when you got home.
“Eh, it was dead,” you might say.
“What did you do?”
“Nothing.”
Neither was true. Every trip to the mall had a routine. You’d swing by the sausage and cheese store for samples. You’d go to the record store to leaf through the sheaves of albums, nodding at the rock gods’ pictures on the wall, content in the cocoon of your generation’s culture. Head over to Chess King to see if there was something stylish you could wear on a date, if you ever had one; saunter casually into Spencer Gifts to look at the posters in the back, snicker at the naughty gifts, marvel at some electronic thing that cast colored patterns on the wall. Then you’d find a place, maybe by the fountain in the center, and watch the world go past in that agreeably tranquilized state of mall shopping.
Dead? Hardly. Okay, maybe it was the afternoon, low traffic. No movie you really wanted to see, the same stuff in the stores you saw last week. Of course you’d go back tomorrow, because that’s what you did with your friends. You went to the mall.
A dead mall is something else today: a vast dark cavern strewn with trash, stripped of its glitter, its escalators frozen, waiting for the claws to take it apart. The internet abounds with photos taken by surreptitious spelunkers, documenting the last days of once-prosperous malls. We look at these pictures with fascination and sadness. No one said they’d last forever. But there wasn’t any reason to think they wouldn’t. Hanging out as teens, we never thought we’d outlive the mall.
James Lileks, “The Allure of Ruins”, Discourse, 2023-06-12.
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September 10, 2023
Indigo today … Indigone tomorrow?
In the latest SHuSH newsletter, Ken Whyte discusses the financial woes of Canada’s quasi-monopoly book chain, Indigo after a series of misfortunes:
“Indigo Books and Music” by Open Grid Scheduler / Grid Engine is licensed under CC0 1.0
As we reported in SHuSH 197 and SHuSH 203, Indigo posted a ruinous 2023 (its fiscal year ends March 30), losing $50 million. That came on the heels of more than $270 million in losses the previous four years. The company’s share price, as high as $20 in 2018, has been floating around $1.30 this summer.
That dismal performance spelled the end of founding CEO Heather Reisman’s leadership at the chain. In June, her husband, Onex billionaire Gerry Schwartz, who has been Indigo’s controlling shareholder and chief financial backstop since the company’s launch in 1997, took the reins and elbowed Heather into the ditch along with almost every member of the board of directors who wasn’t beholden to Gerry personally.
The only non-Gerry director to survive was CEO Peter Ruis.
As I said at the time, Peter Ruis, “a career fashion retailer who landed in this jackpot from England two years ago”, is either “polishing his resume as we speak or negotiating a massive retention bonus to stick around and wield an axe on Gerry’s behalf. My money is on polishing.”
[…]
Meanwhile, I’m hearing that everyone in the publishing industry is being slammed with returns. Publishers usually get a lot of books back from retailers in the first quarter of the year as stores send back unsold inventory from the holiday season. This year, the returns were slower to start, probably because of Indigo’s cyberattack last fall, but they have kept coming right through the second and third quarters. This is coupled with lighter than usual buying for the fall.
The firm’s releases continue to claim that Indigo will keep books at its core, even as it loads its shelves with brass cutlery, dildos, and pizza ovens. According to Google, the core of an apple represents 25 percent of its weight. Books are now less than 50% of Indigone, suggesting more returns and light orders to come.
One final note. I corresponded this morning with a giant of Canadian businessman who has no special insight into the Indigo situation although he’s kept up with the news and, like everyone in Toronto commercial circles, he’s familiar with the Schwartz-Reismans.
He wonders just how involved Gerry is with Indigo these days. Apparently his health is not good. And while he’s still the lead shareholder at Onex, he’s no longer CEO and may not have access to the hordes of ultra-bright hirelings and menials that have long surrounded him.
My friend writes: “My guess is that suppliers are going to start to halt shipping and that a financial crisis is imminent, despite [Gerry’s] line of credit. But I don’t know anything.”
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June 24, 2023
“… every time I see some fine new supercluster-aspirational buzzword-laden legislative boondoggle coming from our federal government I know that my life is going to get worse in some minor, petty, and yet measurable way”
Jen Gerson is irked by the federal government’s latest petty diktat to “save the planet” from single-use plastic bags that bans the use of bags that are not made of plastic:
Those who follow my work will know that I am an unreformed Calgary evangelist. I like this city for a lot of reasons, but one of them is that I’m a member of the Calgary CO-OP, a chain of local grocery stores. For those who are lucky enough to enjoy something like this, a co-op offers particular advantages over their conventional counterparts; we get a small share of the profits that the chain earns every year, for example. The stores stock local produce, meats, grain, and processed foods from Calgary-based suppliers, and from nearby farms. CO-OP also provides a number of top-notch house brand supplies. National chains are simply not as nimble, nor as local. They can’t be.
But I admit that one of the things I enjoy most about CO-OP is its green grocery bags. When stores across Canada began to phase out the use of single-use plastic bags, I was despondent. The environmental rationale for the ban was thin, but mostly I was annoyed because I’m chronically disorganized and can never remember to bring reusable bags.
So when CO-OP replaced plastic bags with a fully compostable alternative, I was delighted. Granted, we would have to pay a small fee to purchase these bags, but the per-unit cost was actually less than what we would normally spend on a box of Glad compost-bin liners. So it all evened out.
To make matters even better, unlike paper straws, the compostable bags are superior to their plastic alternatives. CO-OP advertises this point on their site: “They are stronger than a plastic checkout bag. You can carry a medium-size turkey or three bottles of wine with no problem.”
I can also attest to this. The bags are an absolute win for everybody involved.
So when I discovered on Thursday that Ottawa plans to ban these items, considering them a “single-use plastic”, I lost my goddamn mind.
Not only will this represent a small inconvenience for me and my family, but it is also one of the laziest, most idiotic decisions issued from this remote, non-responsive federal government I have yet to encounter.
The bags do not contain plastic.
Let me say that again, because apparently the sound of western voices doesn’t quite travel all the way to the the slower bureaucrats in the back: “THE BAGS DO NOT CONTAIN PLASTIC”. You fucking muppets.
[…]
Look, Ottawa, are you there? Are any of you listening, or am I just screaming into the void? For the sake of the entire country, I hope, I pray that there is somebody with an IQ above 92 capable of not just reading this desperate missive, but of really, truly understanding it.
This shit — this, right here.
This. Shit.
This is why we hate you.
This is why we fucking hate you.
Nobody outside the Toronto-Ottawa-Montreal triangle sees a headline like “New Initiative from Ottawa!” and thinks: “Oh, how exciting. I’m so keen to see what grand notion those crafty MPs in Ottawa have cooked up now! Come, Maude, let us settle ourselves before the The National at Six so we can understand how our fine federal government is working to make our lives better.”
Nobody does that. Because every time I see some fine new supercluster-aspirational buzzword-laden legislative boondoggle coming from our federal government I know that my life is going to get worse in some minor, petty, and yet measurable way.
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June 12, 2023
“The more recent four or five years at Indigo have been a disastrophe”
In the latest SHuSH newsletter, Ken Whyte outlines the rise and fall of Canada’s biggest bookstore chain that stopped trying to be a bookstore chain and now appears to be looking for a new identity to assume in the wake of several board resignations and the announced resignation of Heather Reisman, the founder and public face of the chain:
“Indigo Books and Music” by Open Grid Scheduler / Grid Engine is licensed under CC0 1.0
Indigo opened its first bookstore in Burlington in 1997 and quickly expanded across the country in competition with the Chapters chain, which it bought in 2001. Heather’s husband, Gerry Schwartz, provided much of the financing in these years. Gerry is the controlling shareholder of Onex, a private equity firm that now has about $50 billion in assets under management.
Influential in Ottawa, the Schwartz-Reismans managed to convince the federal government to approve Indigo’s purchase of Chapters and also keep the US book chain Borders from moving north into Canada — a double play that cleared the field of meaningful competition and wouldn’t have happened in a country with serious antitrust enforcement.
Heather, as Indigo CEO, cast herself as the queen of Canadian literature, making personal selections of books to her customers, hosting book launches, interviewing celebrity authors, etc.
From a financial perspective, Indigo took about five years to get rolling after the Chapters acquisition. It looked steady through the late aughts and into the teens when Amazon showed up in force. Indigo’s share price caved. Unable to convince Ottawa to push Amazon back across the border, Heather adopted a new strategy, backing out of books and recasting Indigo as a general merchandiser selling cheeseboards, candles, blankets, and a lot of other crap to thirtyish women. “We built a wonderful connection with our customers in the book business,” she famously said. “Then, organically, certain products became less relevant and others were opportunities.” This charmed investors, if not the book community, and Indigo’s share price hit a high of $20 a share in 2018. By then, books, as a share of revenue, had fallen from 80 percent of revenue to below 60 percent (they are now 46 percent).
The more recent four or five years at Indigo have been a disastrophe. With its eighty-eight superstores and eighty-five small-format stores, the company lost $37 million in 2019, $185 million in 2020, and $57 million in 2021. Things looked somewhat better in 2022 with a $3 million profit, but its first three quarters of 2023 (Indigo has a March 28 year-end) resulted in an $8 million loss and its fourth quarter featured one of the most spectacular cyberhacks in Canadian commercial history. The company’s website was breached and its employment records held for ransom, resulting in a ten-day blackout for all of the company’s payment systems and a month-long outage in online sales. The share price is now $2.00 or one tenth the 2018 high.
ANALYSIS AND IRRESPONSIBLE SPECULATION
Given everything Indigo has been through over the last several years, and especially the last several months, it’s not surprising that Heather wants to pack it in. She’s seventy-four and super wealthy. There’s nothing but a desperately hard slog ahead for her money-losing company. Why stay?
Still, this has the feel of something that blew up at a board meeting, or in advance of a board meeting. It’s highly irregular for a company to lose almost half its directors in a single day. If these changes had been approached in conventional fashion, there would have been more in the way of messaging and positioning, especially regarding Heather. For all intents and purposes, she is Indigo. It wouldn’t exist without her. They ought to be throwing her a retirement parade and presenting her with a golden cheeseboard. Instead, all she’s getting, for now, are a few cliches in a terse press release.
It’s also weird that this all happened days before we get the company’s year-end results (they were out by this time last year). My guess is that the board got a preview, that the picture is ugly, that there are big changes afoot, and that the directors were nudged out as the start of a major retrenchment or given the option of sticking around for a bloodbath and chose instead to exit.
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