Dickins & Jones has been a London landmark since 1835

The historic shop is due to close in January and will be taken over by two property firms in a �4m ($7m) deal.

House of Fraser said it had taken the action after a review showed the store's high rent meant it had been unprofitable since 2002.

The group has been battling a High Street slowdown which has hit sales.

The lease for the Regent Street store - which can trace its history back to 1835 - has been sold to Shearer Property and Delancey Estates, who plan to redevelop the site.

Tough choice

"It is with considerable regret that circumstances have forced us to come to the decision," chief executive John Coleman said.

HISTORY OF DICKINS & JONES 1835 - Opened under name Dickins, Smith & Stevens, selling women's underwear 1856 - Changes name to Dickins & Jones 1914 - Bought by Harrod's 1959 - Acquired by House of Fraser during its takeover of Harrod's Group 2005 - Sold to property developers Check House of Fraser's shares

House of Fraser plans to move 500 staff at the store to its other sites in the capital.

On Thursday, the firm revealed like-for-like sales had fallen 3.2% in the first 19 weeks of its financial year, as shoppers were reluctant to spend on "big ticket" items with high price tags.

"Trading conditions in the retail market have continued to be challenging in the early part of this year. Management continue to take further actions in driving margin and cost improvements," House of Fraser said in a statement.

The group is the latest in a string of retailers to warn that slowing consumer spending is beginning to bite.

Figures from the Office for National Statistics, also released on Thursday, showed retail sales growth had slowed to its lowest level since January 1999.

House of Fraser owns the Rackhams and Army & Navy chains, as well as 52 outlet stores across the country.