AUSTRALIA'S largest chain of independent music shops - Allans and Billy Hyde - has been placed into receivership with debts of more than $40 million.

Ferrier Hodgson partners James Stewart and Brendan Richards were appointed receivers and managers today by secured creditor Revere Capital, owed $27 million, and hope to sell the business as a going concern.



"Allans and Billy Hyde are two of the best known brands associated with live music in this country holding in excess of 25 per cent market share in retail sales," said Mr Stewart said.



"We are immediately calling for expressions of interest for a sale of the business as a going concern."



Billy Hyde Music Adelaide store manager Greg Adamopolous said the store's 15 employees were in a positive mood and would be telling customers it was "business as usual".



An estimated 30 employees work at the Allans store in Gawler Place which specialises in selling musical instruments, live music accessories and sheet music.



Mr Stewart said the company's 500 employees across 25 stores and four franchise stores Australia wide would continue to be paid by the receivers and their entitlements would be covered under the Federal Government's General Employee Entitlements and Redundancy Scheme (GEERS) if the business could not be sold as a going concern.



But outstanding gift vouchers would not be honoured and deposits would not be refunded - those affected customers form part of the $13.5 million unsecured creditors of the retailers' parent Australian Music Group Holdings.



The group also owns the MusicLink and Intermusic wholesale distribution and importing businesses.



Receivership does not include related company Stage Systems, a backline hire company servicing the festivals and live concerts market.



Mr Stewart said the company, which made annual sales of $110 million to June 30, had been affected by "the decrease in consumer discretionary spending currently being felt by many Australian retailers."



Allans + Billy Hyde Allans Music began in the 1850s when Joseph Wilkie and George Allan opened a music warehouse in Melbourne's Collins Street.



Mr Billy Hyde was a drum manufacturer who perfected the production of drum kits in the 1950s and 1960s, opening his first store in Flemington in 1962.



Allans + Billy Hyde merged in July 2010.