John Lewis has announced it will close the smallest store in its portfolio, putting 127 jobs at risk.
The Knight & Lee department store in Southsea, Hampshire, will stop trading in July.
The closure puts all 127 employees at risk of redundancy and the company said that it will seek to redeploy staff at John Lewis and Waitrose shops nearby.
John Lewis cited the store's small size and the cost of modernisation as reasons behind its decision.
The news comes just weeks after John Lewis warned thatits annual staff bonus is under threat - the first time in living memory as it battles challenging trading conditions.
Around 83,000 staff are usually awarded the payout in March.
In a statement, John Lewis said it did not plan to close any other stores.
Last year, the firm had said it would focus on maintaining its property estate while resizing, refurbishing or relocating some stores over time in order for them to deliver financial returns.
Dino Rocos, operations director at John Lewis, said: "We have not taken this decision lightly and we considered every implication for our partners, customers and the community.
"However, a unique combination of factors, including the significant investment required and the opportunity to sell the property freehold, makes this the right decision for the financial sustainability of our business."
He added that finding suitable roles for the employees affected is an "absolute priority", but "there will unfortunately be some redundancies and we will work hard to support all the partners affected".
John Lewis also announced that it will restructure its maintenance function, moving the majority of its activities to a single maintenance provider – CBRE.
This follows an an 18-month review of its maintenance function and will see 365 maintenance staff move to the new provider in July.