From Greg Kot at Chicago Tribune:

Chicago indie powerhouse Touch and Go cuts distribution service, staff

Touch and Go Records, a pillar of the Chicago music scene and independent music worldwide, announced Wednesday that it is drastically shrinking its business, cutting ties with 20 independent labels and laying off an unspecified number of employees.

“The current state of the economy has reached the point where we can no longer afford” to provide manufacturing and distribution services for the labels, including stalwarts such as Chicago-based Drag City, All Natural, Overcoat. Flameshovel and Atavistic Records; Merge in North Carolina,; and Kill Rock Stars in the Pacific Northwest, said Touch and Go founder Corey Rusk.

The move could drastically hamper the ability of these labels to get their new releases into retail outlets in a timely manner, and could affect their ability to stay solvent during the current economic downturn.

Touch and Go will continue to operate as a label; it has released more than 400 records in the last 28 years including more than 100 on its Quarterstick subsidiary. But the decision to cut distribution will force Rusk to shrink his staff of about 25 people. He would not give specifics in a phone interview Wednesday, but said the decision was “painful for everybody involved.” Several employees reported being “blindsided” by the announcement.

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