Its closure was seen as inevitable after its Benelux-based parent, Codaex, went into administration in June but insiders said the UK firm, which at its height distributed about 100 labels, was still profitable until worried suppliers began to desert it.
In a letter to clients, Codaex UK managing director Ginny Cooper said the switch by several labels to other distributors ‘facilitated our decision to place ourselves into administration’. She said the business was being wound down and she thanked clients ‘for your support and kind words, particularly concerning the situation we have found ourselves in. We have enjoyed every minute of building Codaex UK into the company it became, but sadly circumstances beyond our control at our parent company ultimately decided our fate.’
Declining CD sales brought about in May the collapse of distributors Qualiton in the US and Harmonia Mundi Iberica in Spain and Portugal, followed by Codaex.
However, a new UK distributor may emerge from the wreckage of Codaex. Shortly before the Benelux firm’s collapse it formed New Arts International, a joint venture with producer and distributor Challenge Classics to share distribution and warehousing costs.
Challenge has announced that it is negotiating to buy out Codaex’s share of NAI and is discussing with the UK and French subsidiaries a new operation which would be owned by it and trade as NAI.
‘For the UK we will work together with Proper Note,’ Challenge said in a statement. ‘Malcolm Mills and Eddie Wilkinson [owner and director of Proper Music Group] have offered their welcome assistance. Proper Distribution is a well-respected company with a great reputation in the UK and we look forward to working directly with them. We shall supply them two or three times a week with sufficient inventory to fulfil the daily orders of clients.
‘For France and Italy we will be selling direct to consumers as we have in Netherlands, Belgium, Germany and Luxemburg.’
Challenge’s statement reflected the bitterness felt by staff at Codaex UK about how the rapid spread of rumours within the close-knit recording industry exacerbated its situation. It read: ‘We would like to point out that we are not afraid of competition on fair ground, but it seems that the many rumours spread are damaging everybody’s position in the market with the result of potentially endangering the future of people who have in the past been so dedicated to many of you.’