The chain, which employs more than 4,300 people, confirmed Deloitte will run its 239 stores while it assesses the future of the firm and seeks buyers.
At the end of 2012 the firm, which was founded in 1921, released its financial figures for the six weeks up to October 27. It showed sales were down 13.5 per cent on the previous year, a total group loss of £36.1million and underlying net debts of £176.1m.
The firm's chief executive Trevor Moore said at the time of those figures that "a number of new initiatives" would help to maximise seasonal sales in the run-up to Christmas.
It also warned of potential breaches of bank loan agreements. However, the festive period did not bring the solution.
The Financial Times reports that last week HMV asked its suppliers for around £300m in additional funding to pay off its bank debts and to overhaul the firm. But this was rejected.
HMV launched a 25 per cent off 'blue cross sale' at the weekend, which has been seen as a last-ditch attempt to raise funds, but it seems that will not be enough to save the company in its present form.
BBC News quotes a statement from the company released this evening (Monday) saying: "The board regrets to announce that it has been unable to reach a position where it feels able to continue to trade outside of insolvency protection..."
UPDATE: The company statement in full
"On 13 December 2012, [HMV] announced that as a result of current market trading conditions, the Company faced material uncertainties and that it was probable that the Group would not comply with its banking covenants at the end of January 2013. The Company also stated that it was in discussions with its banks.Since that date, the Company has continued the discussions with its banks and other key stakeholders to remedy the imminent covenant breach. However, the Board regrets to announce that it has been unable to reach a position where it feels able to continue to trade outside of insolvency protection, and in the circumstances therefore intends to file notice to appoint administrators to the Company and certain of its subsidiaries with immediate effect.
The Directors of the Company understand that it is the intention of the administrators, once appointed, to continue to trade whilst they seek a purchaser for the business.
It is proposed that Nick Edwards, Neville Kahn and Rob Harding, partners of Deloitte LLP, will be appointed as the administrators of the Company and certain of its subsidiaries.
The Company's ordinary shares will be suspended from trading on the London Stock Exchange with immediate effect."
The Company's ordinary shares will be suspended from trading on the London Stock Exchange with immediate effect."
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