Released on 8 October 1989, "Hats" was the second studio album by Scottish band The Blue Nile, the album came after a prolonged delay in which an entire album's worth of work was scrapped, the Blue Nile released Hats to rave reviews. It also became the band's most successful album, reaching number 12 on the UK album charts and spawning three singles: "The Downtown Lights", "Headlights on the Parade", and "Saturday Night".
Having finished promotion work for their debut album A Walk Across the Rooftops, the group's record company Linn Records were keen to have a follow-up record, and in early 1985 sent the band to a house in the golfing resort town of Gullane near the Castlesound Studios where the previous album had been produced. However, sessions for the new record hit problems almost immediately. The band did not yet have enough material to make another album, and with the group forced to share a house and having to spend all their time in close proximity with each other, arguments developed among the homesick band members. Exhausted and stressed, their problems were compounded when Virgin Records, to whom Linn had licensed the Blue Nile's records, began legal proceedings against Linn Records, demanding new material. the band was living away from home, no money, miserable, getting sued. We were absolutely zonked, the record company weren't pleased and everyone around was starting to think, this record is never going to get made. It was exhausting.
After almost three years in the studio which produced virtually nothing, having begun and scrapped several songs, then the Blue Nile had no option but to return home to Glasgow; back in familiar surroundings and freed from time constraints, Buchanan overcame his writer's block, while Robert Bell and Paul Joseph Moore began putting musical ideas down on a portastudio. As a result, when the band was finally able to return to Castlesound in 1988, the ideas for the album were already in place and according to Buchanan, "we knew exactly what we were doing. We actually recorded the rest of Hats super quick honestly, half of Hats was, like, a week.
The album was released in October 1989 simultaneously in both the United Kingdom and the United States: since the Blue Nile was essentially unknown in the US in 1989, the cover artwork for the US release of the album was slightly modified for marketing reasons, with the band's name in larger letters. As a promotional tool, A&M Records—who distributed Hats in North America—took out a full-page advertisement in Billboard magazine offering a free copy of the CD to anyone who called a toll-free number which was provided.
Hats peaked at number 12 on the UK Albums Chart. Three singles were released from the album: the first, "The Downtown Lights", was released in September 1989 and peaked at number 67 on the UK Singles Chart, followed by "Headlights on the Parade" in September 1990 which reached number 72, and "Saturday Night" in January 1991, which reached number 50. In the US, Hats peaked at number 108 on the Billboard 200. "The Downtown Lights" reached number 10 on the Billboard Hot Modern Rock Tracks chart in early 1990, becoming the group's only single chart entry in that country.
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