Music chain HMV delivered more dismal sales figures yesterday after its peak trading season was “significantly undermined” by severe weather.

The group, which also owns the Waterstone’s book shop chain, admitted it is facing a battle to meet a forthcoming test on its bank covenants.

It has pledged aggressive action on costs and said it would close 60 stores across its UK businesses over the next 12 months and seek a further £10 million a year of cost savings. It has more than 400 HMV stores in five countries and 311 Waterstone’s bookstores in the UK and Ireland.

The group reported a 13.6 per cent slump in HMV’s like-for-like sales in UK and Ireland in the five weeks to January 1 and said profits for the year to April were set to be near the bottom of the current range of City forecasts.

As well as the disruption caused by snow and ice before Christmas, HMV said its core entertainment markets remained weak and underlined the urgency with which it needed to carry out its turnaround strategy.

Faced with competition from supermarkets in its core CD and DVD markets, the group has branched into new areas such as technology sales, recently including Apple’s iPad, as well as entertainment-related products.

It has also pushed into fashion, mobile phones and Blu-ray discs, while its swoop for festivals and gig venue owner MAMA Group cemented its position in the fast-growing live market.