Allans Music and Billy Hyde stores will keep trading after a buyout by businessman Con Gallin.
The managing director of Australian Musical Imports has bought most of the Allans Music and Billy Hyde assets, including the trading names.
Mr Gallin says the deal ends months of difficult negotiations with the receiver Ferrier Hodgson.
"There were about 25 stores in total.
We couldn't save all of them because we've been negotiating with the receiver for about nine months and it's been extremely difficult.
They weren't cooperative at all," he told ABC local radio.
"We had a final breakthrough about three weeks ago.
"It was right [down] to the line.
They were closing down.
We virtually just got in on the day that they closed." Mr Gallin said key stores in Sydney, Adelaide, Melbourne and Southport in Queensland would continue to trade.
Most staff who want to stay will be able to keep their jobs.
Mr Gallin said his first part-time job while still in school was with Allans Music in Melbourne and he had now bought the company with a commitment to rejuvenate its stores.
"I'm a musician.
And musicians used to own stores and are going back in and the corporate kind of people are sort of leaving," he said.