It’s 40 years since Rough Trade, Mute and Factory Records used an anti-industry attitude to give a voice to the likes of Joy Division and Depeche Mode. The labels’ founders recall why they had to rip things up and start again

‘We did have a minor armed robbery, but nobody got killed,” recalls Rough Trade’s Geoff Travis, looking back on a shaky moment for the west London record shop in 1978. Staff lay on the floor at gunpoint as the till was emptied along with their wallets, although one employee was shown some mercy and allowed to keep the gram of speed that was in his.

The shop had become a target due to its success. After opening in 1976, Rough Trade was soon more than a retail outlet. It became a cultural hub, a place where people socialised, read fanzines, listened to chest-pounding dub reggae or, increasingly throughout 1978, tried to sell the records they had made.

Travis was a fan of the French punk band Métal Urbain, who requested his help with their single Paris Maquis. With the shop booming and a burgeoning distribution network in place, known as the Cartel, Travis decided he could help by releasing it. “Them asking us was the catalyst for doing the label,” he says. A burst of Rough Trade releases soon followed, from Stiff Little Fingers, Augustus Pablo, Swell Maps, Cabaret Voltaire, Kleenex and many more.

Travis felt this was an opportunity to bypass unscrupulous behaviour he saw at other labels. “The history of independent labels was mired in dishonesty, deceit and poor treatment of artists,” he says. “We felt that was something our generation could put right. Even Chris Blackwell at Island Records was known as ‘the baby-face killer’. You can put out great records and be moral. That was the huge difference between independent labels of the late 1970s and what had come before.”

The year 1978 was a boom one for independents. Chiswick, Stiff and Beggars Banquet had been launched in 1975, 1976, and 1977, but now came Cherry Red, Industrial, Fast Product, Fetish and Zoo – and three labels that changed the way independent music sounded, looked and was released: Rough Trade, Mute and Factory Records.

Facebook Twitter Pinterest A Certain Ratio. Taken from the book Mute: A Visual Document. Photograph: Paul Husband

With Rough Trade functioning as a shop, label and distribution network, Travis recalls it being a magnet for talent. “It was a golden period of A&R where everybody just came to you,” he says. “It was like a siren call.” One person answering this call was Daniel Miller, who was making music in his bedroom as the Normal and had just made a test pressing of TVOD/Warm Leatherette, a pioneering release of throbbing and hissing electronics colliding with dry, malevolent vocals. “My plan was to press 500 and if nobody liked it then move on,” says Miller. He took it to Rough Trade and Travis loved it and offered to distribute it. “I had no intentions of becoming a full-time musician or a full-time label,” Miller recalls. But something needed to go on the record sleeve, and he chose the name Mute.

In Manchester, Alan Erasmus and Tony Wilson founded Factory. Erasmus is a quiet figure, often left out of Factory’s story, but praised by the likes of Travis: “He deserves all the credit in the world.” Wilson, a Granada television presenter, was a less forgettable figure – exuberant, theatrical and occasionally pompous. “A visionary and a bit of an arsehole,” says Richard H Kirk of Cabaret Voltaire, a band that released music on all three labels. “A bit of a twat,” says Stephen Morris of Joy Division and New Order. Such insults are coated with warmth, humour and respect, capturing the love-hate relationship Wilson had with everyone. Kirk recalls him treading a line between authority figure and peer. “He used to come to Sheffield and take acid in the Peak District. He was like the school teacher who would give you a go on a spliff.”

In Manchester, people were heading to the Russell Club. It was here that Factory started as a gig night, on 19 May 1978. The first entry in the Factory catalogue, FAC1, is not a record but a poster for the gigs, designed by Peter Saville, who was an art student at the time. In the 2002 film about Factory, 24 Hour Party People, Saville is depicted as being so late with his poster that he turns up after the gig. “It was very late,” he admits today. “But not that late.” Wilson was infuriated by the tardiness and drove to Saville’s house in a wretched mood. “Then he saw it and it silenced him,” Saville remembers. “The mood shifted from: ‘Forget it – you’re a fucking inconvenience,’ to: ‘Get this finished, please.’ It was the beginning of something.”

This led to Wilson suggesting they put out a record of the bands that played at the club, using £5,000 he had been left by his late mother. Joy Division, Cabaret Voltaire, the Durutti Column and John Dowie were selected and Saville designed the Japanese-inspired cover of silver-dyed rice paper inside a heat-sealed plastic sleeve.

Factory HQ was Erasmus’s flat on Palatine Road in Didsbury, Manchester. A Certain Ratio’s Jez Kerr remembers assembling 1,000 record sleeves there in a cloud of marijuana smoke. “Joy Division were supposed to be doing it, but they never turned up. In those records there’s loads of little messages we wrote, like: ‘Joy Division are shit.’” Morris and the rest of Joy Division actually assembled a separate batch. “I’d worked in a mill before, so it was a little bit like that,” Morris reflects, “but with drugs.”

Facebook Twitter Pinterest Daniel Miller. From the book Mute: A Visual Document. Photograph: Antoine Giacomoni

Before Factory, Joy Division attempted to self-release their EP An Ideal for Living. “We took it to Pips nightclub and went in demanding the DJ play it,” remembers Morris. “He took it off after about 10 bars and put Bryan Ferry back on. It was embarrassing, a momentous disaster. We didn’t know what the bloody hell to do with them. We tried to flog them down the pub: 75p or 50p without a sleeve.”

Cabaret Voltaire were saved by Factory and Rough Trade from making a questionable choice for their debut release. “We knew some dubious people in Sheffield and were very close to borrowing money from gangsters to make our own record,” Kirk says.

When A Factory Sample came out in December 1978, it included the Palatine Road address. “The post office were delivering demo tapes in sacks,” recalls Saville, who was by now a partner in Factory. “It was never intended to go beyond that first release.” Within weeks, another label was born in the same way. After demos were sent to Miller, he had his ears set alight by deadpan synthpopper Fad Gadget. “That was when Mute started as a label instead of my own vanity project,” he says.

The three labels were immediately distinct: Rough Trade was rooted in post-punk eclecticism, Mute the futuristic pursuit of electronic music and Factory the celebration of a city and its style. What all three shared was an ethos of fairness, such as deals that split proceeds 50/50 between bands and label.

“It was very collaborative,” says Miller. “We were constantly seeking advice from one another because none of us really knew what we were doing.” It was a time of handshake deals, no contracts or lawyers.

Rough Trade, which operated as a cooperative in its early days, had a reputation as being a quasi-hippie organisation. When working with the Fall, Mark E Smith could be found outside the label offices in the morning making sure everyone was clocking in on time. “He used to be a shipping clerk, so I think he thought it was highly amusing,” laughs Travis. “Making sure this bunch of hippies weren’t showing up late for work.”

He recalls this period of “respect and inspiration” with fondness, as does Miller: “Our competition was the world, not each other. The conventional industry was the enemy. We didn’t want to be polluted by the majors, we wanted to learn things our own way from each other.”

As the independent world bled into, and often took over, the mainstream through bands such as Depeche Mode (who were signed to Mute), New Order (Factory) and the Smiths (Rough Trade), handshake deals gave way to proper contracts and managers and lawyers became part of the conversation. “Things should have been kept as they were,” says Morris. “Once things moved into Charles Street [a lavish and expensive Factory office] they started taking themselves too seriously. The joy went out of it the day they hired an accountant.” The pressure on Factory was increased by the Haçienda, a culturally important nightclub that was also a voracious money vacuum. “Factory could have kept going if it hadn’t of been for the fucking Haçienda,” Morris spits. “It was great, but it was such a weight that it made the whole thing unsustainable.” Factory closed in 1992.

Facebook Twitter Pinterest Tony Wilson (left) with Steve Coogan at the premiere of 24 Hour Party People in 2002. Photograph: Yui Mok/PA

Twelve months earlier Rough Trade found itself in receivership after the distribution company went bust, bringing down the label with it. It returned as an independent in 1999, and was bought by BMG in 2002 before becoming independent again in 2007 when Martin Mills brought it into Beggars Group, a label portfolio that now includes Beggars Banquet, 4AD, Matador, Rough Trade, XL and Young Turks. Mute had major success via Erasure, Nick Cave & the Bad Seeds, Moby and Goldfrapp and was bought by EMI in 2002. After a period that Miller says “was so hierarchical it ended up being impossible to do anything”, Mute became independent again in 2010.

Four decades on, the surviving labels are fiercely anti-nostalgia. “I just keep looking forward and finding new things, ” says Jeanette Lee, a Rough Trade partner since 1987. New things on Rough Trade’s roster include Parquet Courts, Princess Nokia, Sleaford Mods, Dean Blunt, Starcrawler and Girl Band. Miller too has little time for notions of a golden age. When Mute isn’t releasing new music by Liars, Nonpareils, Daniel Blumberg, Josh T Pearson and Ben Frost, he can be found pummelling out contemporary techno as a DJ. He has recently reactivated Novamute, a subsidiary label that focuses on new dance music.

But does the old guard have much of a future? “Independent labels are more important now than they have been for a long time,” Miller insists. “There was a period when people like Depeche Mode and New Order started selling millions, A&R policies merged and it became a grey area. Now majors are moving in a totally different direction from independents. They are very interested in pop, singles and Spotify. That’s a good thing because we can co-exist and present a huge breadth of music. I don’t think anything on Mute would be signed to a major now and it’s healthy to have that separation. Competing for success is good, but competing for artists is not.”

Throughout ups, downs and dabbling with the majors, the surviving labels have returned to what made them so special in the first place: their independence. And hopefully they no longer have to worry about armed robberies.

Mute: A Visual Document is published by Thames & Hudson. Mute 4.0, a collection of anniversary reissues and more, is available now