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Publishers and independent book retailers expressed cautious optimism that the merger of Chapters and Indigo could help bring back stability to the troubled industry.

"I think, in the long run, it's going to help the independents," said Cathy Legate, president of Duthie Books in Vancouver.

A combined Chapters Inc. and Indigo Books & Music Inc. might lessen some of the competitive pressure that has characterized the bookselling business over the past few years, she said, and allow independents to focus on such areas as regional books, special orders and service.

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Publishers are also hopeful.

"It will be good if we can get back to the business of publishing and selling books," said McClelland & Stewart Inc. president Douglas Gibson in Toronto. "Of course, we've always been in the business of publishing books, but the people on the retail side have been heavily disrupted. It will be a relief for them to get back to what they are in business to do."

While the merger would create an "effective monopoly . . . the good news for publishers is, if we have one chain, we don't have these two companies battling for the consumers' dollar and having to do so much deep discounting," said Allan MacDougall, president of Raincoast Books in Vancouver.

He also expressed hope that a financially stronger chain would be more likely to pay publishers on time, adding that the past 18 months have been "brutal" for publishers, many of which waited months for payments from major retailers or had to deal with a significantly higher volume of product returns.

Chapters chief executive Larry Stevenson has said payment delays by his company have not been out of the ordinary.

Ms. Legate said the hard work is just beginning for Indigo Books head Heather Reisman, saying that big-box stores require big investments in inventory and staffing.

"We did the big box, and I don't know how you can make it pay for shareholders."

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A long-time Vancouver retailer, Duthie Books got into the big-box format when it took over the failed Bollum's Books in 1997. But the store was not a money-maker and in 1999 helped force Duthie Books into near-bankruptcy, from which it emerged with one, smaller store.

Winnipeg bookseller Paul McNally, of privately held McNally Robinson, said his large-format stores in Winnipeg and Saskatoon are turning a profit.

But he is worried that a Chapters-Indigo marriage would mean further concentration of a business already dominated by Chapters and the related Coles outlets.

"It's clear that whatever we know about monopolies is now truly operational in the Canadian retail book industry," Mr. McNally said.

Over all, observers said they expected to see stores close in locations such as Calgary, which currently is served by seven Chapters and two Indigo stores.

As well, observers hope Ms. Reisman's apparently successful bid for Chapters will help put it on a more financially secure -- and predictable -- course.

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Chapters outlets account for about 50 per cent of sales for Key Porter Books, said publisher and chief executive officer Anna Porter, and any difficulties Chapters encounters are quickly felt by its suppliers.

"When they catch a cold, we tend to catch pneumonia."

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