Marks & Spencer has announced it will not be taking up its option on new retail space at the Prince’s Gate at Oldham Mumps development.
Oldham Council was contacted on November 22 by the retailer and informed of the decision.
M&S recently confirmed plans to close 30 UK clothing and homeware shops and convert dozens more into food stores as part of a business restructuring.
It came after the firm had reported falling sales and profits in the six months to the end of September.
M&S and Oldham Council had announced the plans for Prince’s Gate in November 2014 as part of a scheme that includes retail and residential opportunities.
Jean Stretton, Oldham Council Leader, said: “We are, naturally, disappointed by this decision.
“When they first informed us of this decision, Marks & Spencer were clear that although this means they will not be taking retail space at the Prince’s Gate site, this does not mean they’re necessarily closing the door on coming to Oldham.
“I want to reassure people that we are continuing to have discussions with them about this and we are hopeful of a positive future outcome.
“The global economic and trade factors affecting M&S at this time are completely outside of our control – and our ambitions for Oldham remain undaunted.
“We will leave no stone unturned to deliver a positive outcome at the Prince’s Gate site which complements our wider regeneration programme in the town centre.
“Despite this news, Oldham town centre is firmly on the up and the stunning Old Town Hall cinema and restaurant complex which opened last month is already bringing increased footfall, trade, investment and visitors here.
“We are in positive discussions with several partners to capitalise further on that success.”
Howard Sykes, Leader of the Liberal Democrat Opposition Group on Oldham Council, added his disappointment at the news.
He said: “Following the euphoria generated by the recent opening of our new town hall cinema complex this news is disappointing but it is also unsurprising given the recent poor financial results and store closures announced by M&S.
“For now the Council’s focus must be on securing a new prime tenant for the Prince’s Gate site, and soon, if this is to remain a ‘game changing’ development for our borough.”