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Industry experts have predicted that HMV may be on the verge of closure after announcing a huge, month-long sale.

HMV have slashed prices on products after recently admitting the store was likely to breach its 'banking covenant'. Failure to meet bank deadlines often leads to companies going into administration and closure, according to an industry expert.

Speaking to Sky News, retail analyst Robert Clark says: "A lot becomes clear after Christmas - the sale suggests that they didn't have a good one and are trying to reel in as much cash to tie things over.

"I’m not sure how much time they’ve got. I don’t think they’ll be able to sway their bankers. Financial institutions are less likely to show patience in this climate."

ITV journalist Laura Kuenssberg added fuel to the closure rumours on Twitter, writing: "HMV starting massive discounting tomorrow, not standard January sale, but trying to generate cash to meet bank covenants - not good."

Is this the end for struggling store, HMV?

A spokesperson for the store has dismissed the claims however, saying that the sale is nothing more than an annual wave of reductions.

"Normally we'd look to run a multi-buy campaign of some kind at this time of year, but we thought we'd freshen our promotional mix up a bit and try something a bit different that will hopefully stand out from all the other sale offers on the high street right now," said HMV spokesman Gennaro Castaldo to Sky News.

The store has struggled in recent years against competition from online stores such as Amazon.com and Play.com, who in turn have also faced tough times. Amazon are set to offer free MP3 downloads to customers purchasing CDs and Play.com is shutting down its direct retail business, instead becoming a marketplace for sellers.