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Touch and Go to cut staff, distribution services

February 18, 2009 | 12:21 pm
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Famed Chicago indie label Touch and Go will drastically cut back its staff and cease its distribution services, according to a statement from founder Corey Rusk. The label will not shutter, but will operate as a heavily scaled back operation.

"Touch and Go will be returning to its roots and focusing solely on being an independent record label," read the statement. "We’ll be busy for a few months working closely with the departing labels and scaling our company to an appropriate smaller size after their departure."

Touch and Go, which rose to prominence in the alternative rock era with the success of such acts as the Butthole Surfers, the Jesus Lizard and Urge Overkill, among others, has acted as a manufacturer and a distributor for 20-plus labels. That operation will end, according to the statement. "The current state of the economy has reached the point where we can no longer afford to continue this lesser known, yet important part of Touch and Go’s operations," reads the statement.

Touch and Go has handled distribution for such labels as Merge Records (Arcade Fire, M. Ward), Suicide Squeeze (Minus the Bear) and Kill Rock Stars (the Decemberists' Colin Melloy). Yet Touch and Go has also been affiliated with Warner Music Group's distribution arm Alternative Distribution Alliance, which has handled the heavy lifting on major releases, including all of Merge's in the past few years.

Merge was distributed exclusively through Touch and Go for 15 years before going direct with the Warners' ADA. In a statement passed along to Pop & Hiss, Merge notes that had it not been for Touch and Go agreeing to manufacture and distribute the label, the Chapel Hill, N.C.-based indie could not have existed "as something other than a singles label."

In an e-mail, Merge founder Mac McCaughan calls Touch and Go "the most straight-up and ass-busting-for-music-they-love people we know."

"Corey Rusk is the most meticulous, cautious, thoughtful business person I know," he said, "which is what makes this whole thing so unbelievable and such a bad portent for the rest of the independent music business -- if a company that did everything the right way can't survive in this environment (and the environment existed before the current worldwide financial disaster -- the Bush economic legacy only piled on), then who can?"

It's unclear at the moment if Touch and Go will continue to sign new acts, or operate only as a catalog imprint. Billboard quotes a source that implies the latter, but a Touch and Go spokeswoman declined to clarify, and Rusk has not yet returned calls. Indications are that Touch & Go will continue to be distributed via ADA, but affiliated labels will soon have to seek new arrangements.

The struggles of major labels have been well documented over the past few years. Album sales continue to suffer double-digit declines in sales, and independent acts have seen unprecedented chart success over the past few years. Acts such as the Arcade Fire and Bright Eyes have seen top-10 debuts, and earlier this year experimental rock act the Animal Collective landed at No. 13 on the U.S. album chart.

But while the Internet has brought greater awareness to lesser-known independent acts -- Touch and Go has helped launched the careers of the Yeah Yeah Yeahs and TV on the Radio, among others -- independent labels are not immune to the changes in business wrought by the decline in physical sales.

I last interviewed Rusk in 2006. While he noted that Touch and Go was having some of the most successful years in its history, he discussed the impending volatile state of the industry.

"The only format we were selling when we started were phonograph records," Rusk told me in an interview that was published in Billboard magazine. "A few years later the Sony Walkman explosion happened, and then CDs started exploding. Those were really tough times.

He continued, "How many albums do we press on vinyl versus how many do we manufacture on cassette versus how many we press on CD? If you got your numbers wrong, you would sink your profitability. In the last 10 years, as CDs have dominated, we didn't have to worry about overmanufacturing a format. We're entering this period where it's going to keep getting more complex. Every year we will have to ask ourselves how many CDs to press. Digital sales are growing, but there's a question in how fast."

-- Todd Martens

Touch and Go's full statement: 

It is with great sadness that we are reporting some major changes here at Touch and Go Records.  Many of you may not be aware, but for nearly 2 decades, Touch and Go has provided manufacturing and distribution services for a select yet diverse group of other important independent record labels.  Titles from these other labels populate the shelves of our warehouse alongside the titles on our own two labels, Touch and Go Records, and Quarterstick Records.

Unfortunately, as much as we love  all of these labels, the current state of the economy has reached the point where we can no longer afford to continue this lesser known, yet important part of Touch and Go’s operations.  Over the years, these labels have become part of our family, and it pains us to see them go.  We wish them all the very best and we will be doing everything we can to help make the transition as easy as possible.

Touch and Go will be returning to its roots and focusing solely on being an independent record label.  We’ll be busy for a few months working closely with the departing labels and scaling our company to an appropriate smaller size after their departure.  It is the end of a grand chapter in Touch and Go’s history, but we also know that good things can come from new beginnings.

Photo: TV on the Radio. Credit: Alex Gallardo / Los Angeles Times

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