In a shock announcement today, Australia’s largest independent music retailer Allans and Billy Hyde, has been placed into receivership with debts of more than $40 million from parent company, Australian Music Group Holdings (AMG).

ABC reports that Ferrier Hodgson partners James Stewart and Brendan Richards, were appointed as the administrators of the receivership by secured creditor Revere Capital, which is owed $27 million by AMG, and the pair hope to sell the business to pay off the accrued debts.

“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 in a statement released today.

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

While the company will continue trading as receivers look at ways to restructure and sell the business and honouring lay-bys, the financial pressure has meant that the music stores will not honour any pre-purchased gift vouchers and deposits will not be refunded.

Customers who have already dropped money on the company will now join the list of unsecured creditors, with hopes that they’ll be paid back depending on how much parts of the business are sold.

Such customers will join the queue of unsecured creditors, and how much money they receive back will depend on whether, and for how much, parts of the business are sold.

According to Adelaide NowMr Stewart said that employees of Allans and Billy Hyde, which currently owns 25 musical instrument shops and four franchise stores with an employed staff of approximately 500, would continue with ‘business as usual’.

Confirming that employees would continue being paid by the receivers and their entitlements covered under the  Federal Government’s General Employee Entitlements and Redundancy Scheme.

The news of the company’s receivership comes only two years after their merging, with the two businesses combining forces in July 2010 to face down financial struggles to begin with.

Despite annual sales of $110 million as of June 30, Mr Stewart said the music stores had been affected by “the decrease in consumer discretionary spending currently being felt by many Australian retailers.”

Allans Music has a history as a music retailer for over a century-and-a-half, established in the 1850s when Joseph Wilkie and George Allan opened a music warehouse in Melbourne’s Collins Street.

Billy Hyde was first formed by the titular drum manufacturer, who perfected his production line of drum kits in the 50s and 60s, opening his first store in Melbourne’s Flemington in 1962.

The news of the company’s receivership, risks putting that long history to a close.