Founded by retailer Brett Blundy in 1980, the chain grew to include more than 230 stores across Australia by the year 2000.

Current owner Ray Itaoui said the growth of digital music consumption in recent years had forced the companies' hand.

"With diminishing physical content available to sell to our customer, it has made it impossible to continue with our physical stores," Mr Itaoui said.

Mr Itaoui said the online business will continue to operate after the closure of the remaining stores.

He assured that all customers who have placed orders would have them fulfilled via the online business if their local store had closed.