MAIN NEWS HEADLINES
August 9 – August 16, 2007 Edition

Indigo Continues
Strong Upward Trend
In Second Quarter

TORONTO/8/6/07–Canada’s largest book retailer Indigo Books & Music, Inc. (TSX: IDG), posted an 8.5% gain in revenues to C$184.9 million for the quarter ending June 30, 2007. The new growth helped reverse net losses from a year ago loss of C$5.8 million to a loss of only C$2.8 for the same period this year.

Indigo and Chapters superstores gained 6.1% while smaller Coles stores grew 6% Indigo’s online sales at chapters.indigo.ca were up 19.6% to C$19.5 million.

Company CEO Heather Reisman attributed the growth to its strong emphasis upon better inventory systems and merchandising programs as well as enhanced customer service.

In May this year, Indigo reported record earnings for its fiscal year, which ended March 31, 2007. Net earnings were up 18.4% over the prior year, and net earnings rose $4.7 million to $30.0 million.

Indigo is a Canadian company and the largest book retailer in Canada, operating bookstores in all provinces under the names Indigo Books Music & more, Chapters, The World’s Biggest Bookstore and Coles. Indigo operates chapters.indigo.ca, an online retailer of books, music, movies and more. It is a publicly traded company listed on the Toronto Stock Exchange under the stock symbol IDG.

In 2005 and 2006, the Company qualified as one of Canada’s Top 100 Employers in a survey run by Mediacorp Canada. To learn more about Indigo, please visit the About Our Company section of chapters.indigo.ca.

In 2004, Indigo also founded the Indigo Love of Reading Fund, a registered charity whose mission is to provide new books and creative learning materials to high-needs elementary schools, enhancing the literacy and self-esteem of students in Canada. Visit chapters.indigo.ca/loveofreading for more information.