House of Fraser pulls out of Chester's Northgate regeneration scheme
The future of a £300m plan to regenerate Chester city centre is to be reviewed after its flagship retailer House of Fraser pulled out of the project.
The department store has said it no longer plans to become an anchor tenant of the Northgate development.
House of Fraser earlier announced it is to close 31 of 59 stores nationally.
Council leaders said they were committed to Northgate but would now reconsider its retail element.
House of Fraser has proposed closing stores from 2019, including its showpiece London Oxford Street branch, as part of a rescue deal.
The 170-year-old retailer will also close stores in Birkenhead, Merseyside, and Altrincham, Trafford, although its Manchester store will survive.
Amid the announcement, Cheshire West and Chester Council said it was informed the 170-year-old retailer would not be going ahead with its Chester plans.
Council leader Samantha Dixon said she was disappointed but the decision "did not fundamentally undermine our ambition to see the comprehensive redevelopment of this vital part of the city".
Plans to redevelop part of Chester around the city's town hall were first mooted in 2000, but have been delayed over economic uncertainty.
The council committed additional funding for the first stage of the scheme - comprising a cinema and market - after it struggled to attract investors.
A second phase of development was due to create 400,000 sq ft of retail space, including a department store due to be occupied by House of Fraser.
Critics of the development were led by Tim Kenney, partner of Chester-based property agent Kenneymoore, who has campaigned for changes to its retail element.
"Business leaders in Chester have long said the city centre can't sustain another 400,000 sq ft of retail space," he said.
"We have nothing but support for the new market and cinema, but competition elsewhere means retail isn't the right place to invest."