Amato goes bust

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    Wed, Nov 21, 2007, 23:20
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  • UK dance vinyl distributor Amato, home to Rekids, Crosstown Rebels and dozens more, is about to file for liquidation.
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  • Major UK dance vinyl distributor Amato is about to file for liquidation. The Bolton-based operation, which distributed (in some cases exclusively) UK labels such as Rekids, Crosstown Rebels, Freerange and Buzzin' Fly, is soon to go into the hands of administrators, leaving more than seventy dance labels owed outstanding revenue from vinyl, CD and digital sales and unable to claim their stock. One label manager, who asked to remain anonymous, lamented, "We are owed a lot of money and we can’t get our stock back. All the sales revenue of the last three singles, which have been our best, will go to the administrator, even though we will still have to pay all the manufacturing bills." Rumours first surfaced last Thursday that the company was in financial trouble although labels were unable to get any details from Amato's offices. Stuart Knight, from electrohouse output Toolroom, rushed to the distributor's warehouse in Bolton only to find it already under lockdown. Another label told RA: "The warehouse is locked and guarded by security, nothing in or out, which is technically illegal before administration". On Friday, the Trash Menagerie blog reported that the liquidation had been instigated by one of its key stakeholders suddenly withdrawing his equity from the company. Other industry sources report that the company had had financial woes for some time, citing mismanagement rather than a decline in sales as the primary reason for the bankruptcy. Several labels RA spoke to such as Crosstown Rebels and Buzzin' Fly have yet to receive an official statement from the company. Likewise, Amato's London staff were still in the dark until late yesterday evening, when all but a handful of employees were made redundant. Kai Fraeger, from Hamburg distributors Word & Sound, which may take on some of the affected labels, stressed that the collapse was not due to a downturn in vinyl sales in the dance market. "The demise has, in my eyes, nothing to do with the market," he emphatically told RA. "We have been distributing some very successful albums with Amato in the UK. The Trentemoeller Chronicles is one example, which I was told was Amato's top import product of the quarter with an initial shipout of 4,000 copies. Even if the market has had a chip taken out of it since 2006 for various reasons such as an overload of mediocre product, these sales could have not been any better." The collapse will have a slight effect on German distributors Word & Sound and Neuton since Amato also handled selected releases for German outputs such as BPitch Control, Poker Flat and Audiomatique. Founded in 1990 by Mario Forsyth, who started out selling dance music from the back of his car boot, Amato merged with vinyl distributors Unique in May 2006. At the time of the merger, the new owners said compilations, digital, DVD and artist albums were the key to Amato's future growth. Amato is the second major UK distributor to fold in the last twelve months. Intergroove UK collapsed in November last year while Prime, Ideal, Greyhound, Integrale and EFA (which took out Force Inc.) have all gone under in recent years.
RA