Fenwick has ended talks to take on the former House of Fraser store in Guildford.
The department store retailer had been in discussions with landlord Canada Life about transferring the lease for the 180,000sq ft unit, which was set to expire in 2039.
However, Retail Week reported that Fenwick has walked away from a possible deal.
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The retailer has shifted its focus to strengthening its regional presence following the sale of its Bond Street flagship in December last year.
Fenwick said the £430m sale would help to fund investments for the rest of its store estate, including its flagship stores in Kingston-upon-Thames and Newcastle.
The retailer revealed the deal had helped it to return to profit earlier this year, reporting a pre-tax profit of £57.1m in the 52 weeks to January 28 compared to a loss of £5.2m the year before.
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