Universal has soon followed up its £44.5 million purchase of Sanctuary Music Group by cutting its deadwood, including its U.K. record label.
Home to Marc Almond and The Charlatans, it was a drag on profits and the company’s last balance sheet showed annual revenues had dropped 35 percent to £16.4 million.
The U.S. label, home to artists including Dolly Parton and former Beach Boys star Brian Wilson, will continue.
"In consultation with senior management of the Sanctuary Group, it has been decided that its Sanctuary Records U.K. division will no longer continue as a stand-alone, front-line record label," said a Universal statement, which claimed the new owners are hoping to minimise redundancies and would be consulting with the label’s artists.
Universal looks to be more interested in developing Sanctuary’s more profitable management business, merchandising, back catalog and agency divisions.
"Helter Skelter will continue as a stand-alone business, and should benefit from investment on our part – which was tough for the ‘old’ Sanctuary to do of late," a Universal spokesman told Pollstar mid-August.
Sanctuary racked up losses of £56.7 million in the last financial year, although it had narrowed losses in the six months to the end of March to £4 million from £17.6 million a year earlier.
Sanctuary’s management arm, which handles the careers of stars such as Elton John, James Blunt and Lulu, meanwhile notched up revenues of £10.2 million, up 48 percent on the first half of 2006.