TORONTO -- Indigo Books & Music Inc. trimmed its losses and increased revenues in its second quarter, buoyed by a renewed interest in reading and growing sales tied to at-home learning and kids entertainment.

The Toronto-based retailer said online sales and curbside pickup helped the company post a strong financial recovery despite shopping in brick-and-mortar stores continuing to lag.

"Traffic remains well below historical levels, with the result that sales are still not where they were pre-COVID,"  CEO Heather Reisman said Wednesday during an investor call.

"Our downtown stores, generally our biggest contributors both in sales and profits, continue to be particularly impacted by changes in work habits," she said, noting that those stores are seeing "very limited activity compared with normal times."

Indigo said it lost $17.5 million or 63 cents per share for the three months ended Sept. 26, compared with a loss of $20.5 million or 74 cents per share a year earlier.

Revenues increased by almost one percentage point to $205.3 million from $203.4 million.

Indigo attributed the gain to a more than doubling of its online channel, with growth of 113.6 per cent, buoyed by interest in core categories of reading, wellness, at-home learning and entertainment.

The retail store network said it is recovering but is still below normal levels after facing closures to stop the spread of COVID-19.

With no outstanding debt and a cash balance of $137.5 million, Indigo said it is positioned to "manage through these very uncertain times."

"Our team has put out extraordinary effort over the last eight months and meaningfully pushed our business forward notwithstanding the challenges of operating in a COVID environment," Reisman said in a statement.