HMV Group, the music and books retailer, is reviewing its £24 million media planning and buying account.
The troubled retailer is conducting the review with the intention of consolidating its main HMV account with its Waterstone's business.
OMD UK currently handles the £19 million HMV business, while its sister Omnicom agency PHD oversees the £5 million Waterstone's account.
Both agencies have been invited to repitch for the business alongside a number of other undisclosed agencies.
The media review follows recent financial results from HMV that showed a first-half loss of £31.8 million and put its new chief executive, Simon Fox, under pressure to deliver cost savings.
In December 2006, HMV issued a warning that its Christmas sales would be lower than expected, owing to a weak music chart and competition from music file downloading. However, in the five weeks to 6 January, the retailer did manage to improve group sales by 10.3 per cent.
Fox, who replaced Alan Giles last September, said that market conditions remain "very difficult".
Last year, HMV held a creative review and added Quiet Storm to its roster. The agency created a brand campaign that ran last autumn, after being appointed by the marketing director, Graham Sim. The agency Beechwood also works on creative projects for the retailer.
A HMV spokesman said: "In keeping with HMV Group's current strategic review for the business aimed at delivering group synergies, HMV and Waterstone's confirm that they are looking to appoint a joint media agency to manage their respective media purchasing requirements in future.
"A shortlist of agencies has been compiled, including the two incumbent agencies, OMD UK and PHD, both of which have been invited to pitch for the new combined account. An announcement regarding the selection of the successful agency will be made in due course, but is likely to be by Easter."