Cinram International Income Fund stocks plummeted Monday after word that Warner Home Videos is pulling out of its exclusive contract with the CD and DVD manufacturer in favour of a French competitor.
“While we are disappointed with the decision by WHV to end our over six-year relationship as their exclusive service provider of standard DVD products and distribution services, we will nevertheless be working closely with WHV to ensure an orderly transition of the services and ensuring that all affected employees and other stakeholders are given the absolute greatest consideration during this process,” said Cinram CEO Steve Brown in a statement.
Cinram, one of the world’s largest manufacturers of CDs and DVDs, has 1,000 employees in Canada with manufacturing facilities in Scarborough’s North end. The move is expected to affect operations in North America, Mexico, Britain, France, Germany and Spain.
Cinram estimates that Warner Home Video accounts for about 28 per cent of their business. Warner’s decision to terminate business on July 31 is a huge blow to the company that has already been engaged in cut backs and layoffs prior to the announcement.
Cinram has undergone many changes as the popularity of downloadable entertainment grows, and sales of CDs and DVDs have declined.