Australia's largest independent music retailer, Allans Billy Hyde, will close with the loss of 513 jobs after the failure to find a buyer for the struggling business.

Receivers and managers Ferrier Hodgson said the stores were expected to close in early November.

Australian Music Group Holdings, which trades as Allans Billy Hyde, was placed into receivership in August by one of its creditors.

Unsecured creditors were owed approximately $13.5 million and employee entitlements were estimated to reach about $3 million.

The company continued trading as receivers restructured the group and attempted to sell some or all of the stores.

During that time 80 employees were made redundant and a number of other employees resigned.

Receiver Brendan Richards said the further loss of 513 jobs was disappointing but a buyer could not be found.

"We exhausted all avenues and there is no other way forward for this business," he said in a statement today.

"These people have served music lovers and been a key part of the Australian music industry for generations.

"It is a sad day for live music in this country."

Mr Richards said the receivers would work with the administrator to help employees make claims for their entitlements through the Government Entitlements and Redundancy Scheme (GEERS) as quickly as possible.

Four franchise Allans Billy Hyde stores are independent and not affected by the receivership.

AAP