A Canadian record store retailer is the front-runner to buy HMV and could dash Mike Ashley’s hopes of acquiring yet another ailing high street name.

Sunrise Records, run by entrepreneur Douglas Putnam, is the preferred bidder in an auction being run by administrators KPMG, reported The Sunday Telegraph.

Putnam is understood to want to buy the entire business, a move which could save the jobs of the 2,200 staff working at the retailer.

KPMG said last month that ‘several’ businesses had made an offer for HMV.

The most prominent of those bidders was Sports Direct mogul Ashley, who was reportedly seeking a six-month ‘rent holiday’ from HMV landlords, telling them that he wanted to keep as many stores open as possible but that he would require their cooperation to do so. Ashley took the same tack with House of Fraser landlords after he picked up the busines for £90m out of adminsitration last summer.

HMV slumped into administration for the second time in six years just after Christmas, blaming its collapse on a “tsunami” of retail challenges. It previously entered administration in 2013 but was rescued by restructuring specialist Hilco.

Since 2013, the business has struggled amid the shift to digital streaming rivals such as Netflix, Spotify and Amazon Prime’s video and music services despite a revival of physical sales in some categories, particularly vinyl records.