Homer’s GM Mike Fratt forwarded the following letter that he received in mid-November. I can’t tell if what’s happened to Southern — once a leading indie music distro — has anything to do with the economy or not.

Dear Friends,

On November 21st, 2008, Southern Records Inc. of Chicago (SRI) will cease operations. Chicago Independent Distribution, which is owned and operated by SRI’s current General Manager Jim Zespy, will take over distribution operations without interruption.

Southern Studios began operating in London in the late 1970’s, first as a recording studio, then as a group of record labels. With time, the activities of Southern grew and several affiliate companies were formed in the UK. A U.S. company was first established in the late 1980s and eventually led to the establishment of the U.S. distribution facility, SRI, in Chicago in 1993.

2005 saw the passing of the company founder and principal shareholder, John Loder. John’s family has since moved to allow the sale of each company to its existing management. The Chicago-based company, Southern Records Inc., will cease operation as part of such an arrangement.

Southern Studios will continue to manage its record labels from their London office, including Black Diamond, Bluurg, Crass, Exitstencil, Latitudes, Southern, Truth Cult, and Wrong.

Chicago Independent Distribution and Dischord Records have established a new partnership for North America. Chicago Independent Distribution will also continue to distribute the record labels owned and/or operated by Southern Studios in North America.

Chicago Independent will remain the exclusive home of the following labels in the USA: Aurora Borealis, Black Diamond, Bluurg, Constellation, Crass, DeSoto Exile on Mainstream, Graveface, La Societe Expeditionnaire, Latitudes, Marriage, My Pal God, Outer Himalayan, P.W. Elverum & Sun, Permanent, Retard Disco, Sickroom, Southern Records, Truth Cult, Upset! The Rhythm, and Wrong Records.

OK, so what’s this really mean? The first paragraph seems to indicate that no one will notice a change as a result of this business transaction. I asked Fratt. “Depending on the deal they did, this could mean small artists are left holding the bag, so to speak,” he said. “Even though the new company has their product, artists may have to do a new ‘deal’ on that with the new company and then try to navigate the closure of Southern to collect for what they sold. Or, it may be seamless and no outstanding accts payable issues.”

Fratt foresees nothing but gloom for the music industry and business in general deep into next year. “The volume of national chain closures (in every sector; retail, food, services, etc) as well local businesses will be staggering in the next 6 months,” he said. Hold onto your hats.

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