Poptones, the record label founded by Alan McGee, yesterday admitted that it needed to raise more money to keep going. The company said it had started a "strategic review" which would look at the financing options available to it.
Mike Blackburn, Poptones' chairman, said: "These are difficult times in the music industry. The board is examining a number of options and a further announcement will be made in due course." Poptones, established over a year ago, only had nine staff at its north London office but it said that this would be reduced by four or five workers. "Redundancies that have had to be made reflect the board's desire to bring costs at the label in line with current levels of revenue and cash resources," the group said.
It is thought that the review, led by Mr Blackburn, will look at attracting new investors, an outright sale or closing the business down.
The bands signed up by Poptones include Cosmic Rough Riders and Ping Pong Bitches. The company attracted a series of high profile investors, including Julian Richer, the music equipment retail magnate. Mr Richer was lured by Mike Edelson, Poptones's original chairman and the founder of a series of stock market stars such as Knutsford.
Mr Richer has a 16 per cent stake in Poptones while Mr McGee, who discovered the band Oasis, holds 39 per cent. The Queen is reported to have a stake.
The company raised £11.5m through a placing to list on the Alternative Investment Market last year at 2p a share. The stock briefly hit 2.27p but closed yesterday down 0.2p at 0.67p.Reuse content