Flyer for the New Fast Automatic Daffodils Gig at the Haçienda

Factory Records had begun as a series of club nights at the Russell Club in Hulme, Manchester. Tony Wilson one of the founders saw Factory as an engine for cultural change rather than a business. He and Alan Erasmus had started the Factory label in 1978 running it from office set up in the home of Alan situated on Palatine Road, whilst Tony was still a reporter working for Granada Television in Manchester.

Early success with releases by A Certain Ratio and Orchestral Manoeuvres in the Dark were soon added to by other bands. Tony Wilson’s interest in allowing the artists freedom to create and perform how they wanted to at the time, soon meant other bands were interested in joining the label.

It became apparent that a more formal structure was needed to run the music business and Factory (Communications) Ltd was formed from a shelf company called Canehand [Kanehand], as there was an urgent need to have a company established to satisfy several deals that were being agreed in 1980. The goodwill of the Factory label, which until then had been under the control of Tony Wilson were to be transferred across to Kanehand which would still initially be controlled by Tony Wilson until the company had been correctly set up in order not to be financially disadvantaged to be later joined by Alan Erasmus, Robert Gretton, Martin Hannett and Peter Saville.

The shelf company, incorporated on the 24th October 1980 held an Extraordinary General Meeting held where it had been agreed to replace an existing clause to the Memorandum of Association which then allowed the business to carry on as manufacturers, wholesalers and retailers gramophone records, television recording equipment and also to carry on the business of music publishers and in this connection to enter into agreements and other arrangements and to employ authors and composers of and to purchase copyrights and other rights in musical and dramatic compositions of all kinds.

The change of name was certified by the Registrar of Companies on the 13th November 1980 It had been hoped to have named the company Factory Records Limited but a search of records at Companies House revealed that the name The Factory Records had already been created by Micky Most, a music producer and entrepreneur, in September 1977. Tony Wilson was advised against acquiring the company as there might be skeletons in the cupboard, since it had not filed any annual returns since it had been formed.

An earlier application for name of business registration suggests that Tony Wilson and Alan Erasmus wanted the company to be known as Movement of the 24 January Publishing Music however, the Registry of Business Names returned the forms with a handwritten note, please chose another business name, the above not acceptable for our files.

Factory, as it became known, became an established part of the Manchester music scene and attracted more artists to the label, who were attracted to the hands-off approach Tony Wilson believed in. As well as promoting artists Factory also became involved in the club scene with the opening of the Hacienda nightclub and a cafe-bar called the Dry Bar in 1989, both based in central Manchester. Shortly after this Factor acquired new premises on Princess Street, Manchester as its headquarters in 1990. The group by now was enjoying a great deal of success both in nationally and internationally.

However, by the end of 1990 its financial position began to deteriorate seriously as the result of the new projects which required additional funding and the enforced closure of the Hacienda, during 1991, for three months resulting in the loss of much needed income. A restructuring of Factory was required to satisfy a number of creditors, owed money by Factory, for Factory this was a serious situation as it was on the brink of closure if no viable solution to find further funding could not be found. The implications would have a profound effect on Tony Wilson’s original desire to be an engine for cultural change rather than a business driven by money was in peril.

The Nineties continued to be a bad period for Factory, it was still in a serious financial position, added to by heavy demands on financing the recording and production of albums. Factory eventually declared bankruptcy in 1992, the Hacienda continued as a nightclub until 1997 when it too closed ending the labels contribution to an earlier hoped for cultural shift by those involved in the original Factory.