In sudden and shocking fashion, it was announced today that Touch And Go Records, the venerable Chicago label, would be closing down its distribution wing and, at least for the moment, will no longer be releasing new music.

Touch And Go Distribution, formerly Southern Distribution, moved labels like Merge, Drag City, Thrill Jockey, as well as their own Touch And Go imprint and subsidiary Quarterstick Records. Among the Touch And Go label roster, bands like Slint, The Jesus Lizard, Calexico, Brainiac, The Dirty Three, Urge Overkill found their audiences during their association, with some staying on even when big label money called.

The blame falls, of course, on the bad economy and the ever-dominant digital market making physical product less and less financially viable. While a return to releasing new music may yet happen (in fact a couple of releases are still slated to come out) it is all dependent on a market recovery, something that most analysts are not counting on. Essentially, this could well be the end of one of independent music’s cornerstone institutions.