Music, DVD and book retailer HMV Group said first-quarter same-store sales fell 4.4 per cent and it had seen few signs of an improvement in the tough retail market.
HMV, which owns the Waterstone's bookstore chain and has agreed a £96-million ($170 million) takeover of rival Ottakar's, said total group sales in the first 21 weeks of its financial year to end-April were flat.
"Conditions for high street retailing in the UK deteriorated during the period, particularly in London and other major city centres following the terrorist bombings in July," the company said in a statement.
At HMV's UK & Ireland stores, total sales fell 3.7 per cent during the quarter, with like-for-like sales down 9.2 per cent.
At its Waterstone's book stores, total sales fell 4.6 per cent, with like-for-like sales down 6.4 per cent. "Competition in the book retailing market is continuing to intensify, not least in the growth in book sales by supermarkets and online retailers," the firm said.
Earlier this month, Ottakar's said its board would recommend a 440-pence-a-share offer from HMV, reneging on their previous recommendation of a 400-pence-a-share bid from private equity consortium Bookstore Acquisitions Limited.