Music City Record Distributors has sold its one-stop account base to ATM, a division of Sandusky Distributing Company in Cleveland, Ohio.

"We are divesting ourselves of a shrinking, low profit business," explains Bruce Carlock, president of the Nashville-based retail and wholesale operation. The move "allows us to eliminate about two-thirds of our inventory and frees up cash for other opportunities."

As part of the deal, Music City -- which runs 20 stores under the logos Cat's, Pop Tunes, and Monster Music -- will begin buying deep catalog from ATM. But Music City will retain purchasing for new releases and catalog promotional deals, and frontline catalog.

Although it is exiting the one-stop business, the Nashville-based company will continue to participate in other wholesale businesses, including rackjobbing some local accounts. But due to the inventory reduction, Music City will let go about five employees, the first time it has laid off employees in its 54-year history.

ATM, based in Streetsboro, Ohio, has been picking up business as the one-stop industry consolidates. In addition to its one-stop, it runs a rackjobbing operation under the name Arrow Distributing.