Montreal: DEP Distribution Exclusive Ltée (DEP), Quebec’s second largest independent record distributor, declared bankruptcy on Monday.

The closure affects 15 employees and a long list of labels and recording artists who are now out of pocket, and product.

Co-owned by Unidisc Music Inc., controlled by George Cucuzzella, and Universal Music Canada, DEP president Maurice Courtois attributes the failure to the closing of HMV's chain of stores and sinking CD sales in the province.

"HMV was the trigger because it was still 25% to 28% of our budget. Losing a player like that, it hurts. It came to put the end to a situation triggered by the loss of revenue caused by the declining volume," Courtois told le Soleil.

Courtois had launched the company in 1996, with retailers wanting to prevent provincial media conglomerate Quebecor from holding a monopoly after absorbing Réseau Select.

"It was not healthy for the industry, it was not healthy for the artists, but I have the impression that today we find ourselves at the same point," Courtois told le Soleil. Québecor finds itself in a quasi-monopoly position again but it's over now for DEP and Courtois.

The most recent statistics show that compact disc sales nosedived from 8.6 to 6.6 million copies between 2015 and 2016, shaving off billings of as much as $20M wholesale in the 12-month period.

DEP had agreements with many flagship record companies in the province including Spectra Musique (Vincent Vallières, Patrice Michaud, Michel Rivard, Susie Arioli, Richard Séguin, Zachary Richard), La Tribu (Les Cowboys Fringants), Dare to Care/Instinct Musique (Éric Lapointe) and Coyote Records (Di Astronauts, Millimetrik). Individual artists affected include Roch Voisine, Annie Blanchard, Joannie Benoît, Maxime McGraw and Marie-Jo Thério.

DEP was also responsible for the distribution of Universal Musique France products in Canada.

The remaining option for artists and labels in the province is Distribution Select, a division of Québecor Media.

Over the years, the privately held company won 4 Felix Distributor of the Year awards and generated over $400M in business.

Part of DEP Canada holdings is the digital distribution platform Believe Digital Canada which will survive under some type of restructuring and new shareholders.

Cucuzella is the founder of Unidisc Music, a diversified music company with interests in music publishing, copyright and distribution. Since its birth in the late 70s, Unidisc has acquired a large number of catalogues once owned by record labels such as De-Lite, Solar, Sutra, Aquarius, Attic, and Beyond. Today it owns master records and publishing and has a catalogue of albums that include some titles by Corey Hart, April Wine, Crowbar, Ronnie Hawkins, Salsoul Orchestra, The Nylons, The Stampeders, Moxy, A Foot in Coldwater, King Biscuit Boy and Tom Cochrane titles released on the Daffodil imprint.

It is expected that the spoils will go to Distribution Select; however, Universal, its affiliated Cadence Music, and the ILS Group will likely be going after some of the business lost by DEP. Meantime, Sony Musique has been fast off the mark in snapping up newly available talent. Unconfirmed are the hiring of former DEP employees, Alain Martineau and (ex-CBS staffer) Mario Lefebvre.

The fallout out from HMV's insolvency doesn't end with DEP as several other firms are still trying to pick up the pieces after writing down amounts as high as $250K and an ongoing loss of business.

-- Various sources including le Soleil