Corey Rusk — Chicago-based Touch & Go’s founder — issued a statement that was brought to my attention through Greg Kot’s blog at the Trib.

“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.”

UPDATE – 02/19:
According to Billboard, T&G will not only be cutting distribution, but also “will stop releasing new albums and operate going forward as a catalog label.” Spring releases will still hit the street as scheduled.
Brings a tear to my Chi-eye…