Music retailer HMV has held talks with Sir Richard Branson’s Virgin Group about buying part of its Megastores chain. Financial Times. The Times. Daily Telegraph

They most recenlty met in the past fortnight but the two sides were so far apart on the valuation of Virgin Megastores and the structure of the deal that discussions did not advance.

HMV is only interested in parts of the Virgin portfolio and there would be significant competition issues as HMV is the leading music retail specialist, while Virgin is second.

The market is consolidating as the traditional model of music retail under threat from legal and illegal online alternatives, as well as supermarkets.

However, even Tesco said this month that its sales of CDs and DVDs were slowing.