I woke this morning to find this in my inbox - Kobo sold to Japanese company, Rakuten Inc. I am literally speechless (perhaps in part because I write in the basement and there is nobody to talk to down here). In a reporting period that showed overall decrease in revenues, sales in the Kobo division are up 219% over the same quarter last year. In their annual report for 2011, Kobo is front and center; part of their bold march into the future of reading. This move comes as a bit of a surprise.
Indigo has seen some growth from their general merchandise which would explain why a quarter of their floor plans now seem to be filled with mugs, decorative globes and knick-knackery. In their latest release, they have indicated that they will be focusing more on this part of the business. I’m not sure they can sustain mug and notebook sales if customers stop coming in to look for books.
In the interest of fairness, Indigo CEO Heather Reisman recently revealed in an interview with Canadian Business that she doesn’t believe they have the war chest needed to keep the Kobo division competitive. The new Japanese owners are talking about putting over a hundred million behind Kobo’s next phase.
Perhaps this is the right move for Kobo, with this new financial backing, they might be able to cut back on their backlog of pending titles. Publishers interested in doing short term sale prices would be able to do so without having to keep their titles off the Kobo shelves (pricing delays have been a bone of contention for some time now). As an owner of a Kobo Touch I have to say that it is a truly excellent product and I hope to see it succeed. Still, this all seems unfortunate for Indigo.
Even so, I wish them all the best (after all the acquisitions, they are pretty much the only place left in town where I can buy books).