Shares in HMV were down on the FTSE in morning trading after the group announced the sale of its business in Canada.

HMV Canada, which has 121 stores and made an operating profit of £2.3 million last year, will be sold by the group to Hilco UK for £2.0 million.

The sale follows the recent disposal of HMV's Waterstones bookstores chain. HMV is currently seeking revamp as it faces possible being beaten out of the market by Amazon, the internet and supermarkets that offer music at cheaper prices.

Simon Fox, Chief Executive of HMV, said, "The Board has fully explored the options available to it for HMV Canada, and believes that a sale to Hilco is the correct decision for the business at this time, whilst reducing the operating leverage in the continuing Group."

"Having received shareholder approval for the disposal of Waterstone's, and with a refinancing in place, the Group is focusing on clear and tightly defined plans for transforming HMV into a broad-based entertainment business."

By 10:40 shares in HMV were down 0.64 per cent on the FTSE Fledgling to 9.39 pence per share.