If HMV was to go bust, it would be the second time it has collapsed in recent years, having filed for administration in 2013, after which it was acquired by its current owner, Hilco.
"Even an exceptionally well run and much-loved business such as HMV can not withstand the tsunami of challenges facing United Kingdom retailers over the last 12 months, on top of such a dramatic change in consumer behaviour in the entertainment market".
Paul McGowan, executive chairman of HMV and its owner Hilco Capital, told the BBC: "Even an exceptionally well-run and much-loved business such as HMV can not withstand the tsunami of challenges facing United Kingdom retailers over the last 12 months on top of such a dramatic change in consumer behaviour in the entertainment market".
Gift vouchers for HMV will be honoured so long as stores continue to trade, administrators have said..
Will Wright, Neil Gostelow and David Pike from KPMG's Restructuring practice have been confirmed as joint administrators to HMV Retail Limited and HMV Ecommerce Limited, KPMG said in a statement late Friday.
HMV said it sold 31% of all physical music in the United Kingdom and 23% of all DVD and Blu-ray and that its market share had grown month by month throughout the year.
HMV is on the brink of entering administration.
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Since its last collapse, HMV had hosted a series of live events in store with musicians like pop star Kylie Minogue and grime artist Stormzy in a bid to increase footfall.
The shift away from CDs and DVDs to streaming services has only intensified since Hilco saved HMV six years ago, as Apple, Netflix and Spotify continue to dominate the battle for eyes and ears.
Executive chairman Paul McGowan said consumers had switched "at an ever increasing pace" to digital downloads instead.
"Business rates alone represent an annual cost to HMV in excess of £15m".
While Christmas is normally a time of higher revenues for retailers, the number of shoppers hitting the post-Christmas sales dipped this year.