HMV has announced it will wind up all its retail business in Hong Kong after a 25-year presence in the local music market.

HMV Digital China Group Ltd said its indirectly wholly-owned subsidiary HMV Retail experienced drastic changes during the past few months, according to the Hong Kong Stock Exchange filing on Tuesday.

With the emergence of Airpods, which resulted in a significant drop in sales of their bestselling earphones, coupled with a seemingly saturated market for speakers and a lack of improvement in traditional audio-visual sales, a rapid decrease in sales was recorded in the past few months.

“HMV Retail has not been generating sufficient revenue to cover its own operating expenses and there is no reasonable prospect of making any significant improvement on its financial performance or operation in the foreseeable future,” chairman Stephen Shiu Junior said.

As disclosed in the filing, the revenue generated from HMV Retail was approximately HK$31.55 million (US$4.04 million), a decrease of approximately 41% compared with the corresponding period in 2017.

The company said in early December it was considering liquidating its retail units after the landlords of two shops on Hong Kong Island and one in Kowloon filed lawsuits to claim unpaid rent of HK$4.85 million and take back the shops, Apple Daily reported.

HMV has eight retail stores in Hong Kong. “The Company is under negotiation with the landlords of the settlement plans,” the filing said.

The British music retail chain entered the Hong Kong market 25 years ago and became the largest CD and DVD retailer in the city.

In 2013, HMV Retail’s head office in the United Kingdom encountered financial difficulties and filed for bankruptcy, winding up all its branches worldwide.

Private equity firm AID Partners Capital Holdings Ltd bought the Hong Kong and Singapore operations. Shui’s company bought the retail music business in 2016 for HK$408 million.