BARKERS, the 135-year-old Kensington department store, is to close in January, making way for Britain’s first organic superstore.

Whole Foods Market, the American owner of Fresh & Wild, is to take over the 75,000 sq ft occupied by Barkers, the only remaining department store on Kensington High Street in the capital after the closures of Pontings and Derry & Toms.

House of Fraser, which owns Barkers, confirmed that 250 jobs would be put at risk by the closure, including 112 full-time posts. A 90-day consultancy on the job cuts is under way, with the retailer hopeful of moving many of the staff to other stores.

The Times has learnt that House of Fraser is in “very preliminary” talks to open a 120,000 sq ft store in a new shopping centre in White City, West London, which is due to open in 2007.

Property specialists said that House of Fraser was intended to be the anchor tenant for the development by Westfield, which is aiming to attract Bond Street designer stores alongside stalwarts such as Marks & Spencer and Top Shop.

Whole Foods Market, which bought Fresh & Wild, the seven-store British organic chain in January 2004, has bought the lease to the lower ground, ground and first floors of Barkers for its flagship outlet.

The lease for the second floor is being returned to the landlord, Relsa Barkers, which has re-let the space to Associated Newspapers, publisher of the Daily Mail and Evening Standard, which already occupies the upper floors of the building.

House of Fraser said that it had decided to move from High Street Kensington because the area did not attract a sufficient number of brand-conscious, upmarket shoppers.

While the store is still profitable, it is understood that returns from the site were beginning to wane as the number of high spenders visiting dwindled. The street is now dominated by volume retailers, with wealthy fashion followers drawn to Sloane Street, Bond Street and Kings Road.

John Coleman, chief executive of House of Fraser, which also announced plans to move out of Dickins & Jones, its high-profile store on London’s Regent Street, said: “We continue to review our portfolio of stores, in some cases taking the difficult decision to close those which do not fit with our mid to long-term strategy. At the same time, we are developing the portfolio by adding stores in strategically important locations.”

John Barker opened the first Barkers store at his showrooms in Kensington High Street in 1870. The store became part of the House of Fraser chain in 1975, trading from 87,000 sq ft.

House of Fraser spent £5.5 million refitting Barkers in 1998 and the store now has a net asset value of £8 million. Analysts expect House of Fraser to book an exceptional loss of between £500,000 and £1 million, depending on the level of redundancies, but the deal will result in a positive cash benefit of £400,000.

Analysts said that they were not altering profit forecasts as a result of the deal.

Rhys Williams, at Seymour Pierce, said: “Overall, we believe this is the correct strategy of getting out while the going is good. House of Fraser continues to manage its business to suit the market conditions, keeping its stock levels tight and costs under control.

“With profits in the short term being boosted by the James Beattie acquisition, as well as the imminent store-card contributions kicking in, we believe that House of Fraser’s prospects look better than the sector’s average.”

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