HMV has said that its like-for-like sales have fallen by a disappointing 10.2 per cent during the 26 weeks to 27 October amid slowing consumer demand.

The company's pre-tax loss fell to £36.1m, compared with £50.1m the previous year. The discouraging results were reported at a time when the company managed to secure £40 million in financial support from its suppliers in order to help the chain continue operation smoothly during the crucial holiday season.

The company is reportedly in talks with the banks after it reported lower than expected results as even pre Christmas season failed to boost sales significantly. The weak performance would mean that it is unlikely that the company will meet January and April loan obligations. The company is not likely to meet its targets till April next year and is thus holding discussions with the banks.

The company has been selling off its units and closing down loss making stores in order to reduce debt. HMV sold parts of its business, including the Waterstones book retailer and closed several stores. It has also sold its Hammersmith Apollo venue in an attempt to reduce dent and negotiate a deal with its lenders.

The shares of the company fell by a whopping 40 per cent on Thursday morning to mere 2.375p. The 238-strong chain now has a market value of £10 million.