A major department store under threat of closure has missed out on a deal that would have saved it.

The Co-op in London Road, Brighton, will close by February 2007 with the loss of at least 60 jobs unless a buyer is found.

Yesterday the Co-operative Group announced its Brighton and Eastbourne branches were not among nine department stores sold to the Anglia Regional Co-operative Society for an undisclosed sum.

The group is selling or closing its 36 nationwide department stores, which lost the company more than £4 million in 2004.

Ten are due to close next month.

News the four-storey Brighton Co-op has not been sold reawakened fears about the future of London Road's rundown shopping area, where traders say they are fighting a losing battle against graffiti and litter.

May Cragg, who runs nearby Patricia's flower shop, said: "It's just dead here at the moment. Christmas was horrendous.

"We need a big boost in London Road and I very much hope someone does buy the Co-op. The people who work there have given such good service and a lot of them have been there since they left school."

The street, the main gateway for pedestrians to the seafront from the north, has been earmarked for regeneration along with Lewes Road.

A spokesman for the Co-op said it was still optimistic the Brighton store could be sold and there had been "significant interest" from potential buyers.

The group is trying to sell the store as a going concern, which would mean all 39 full-time and 22 part-time staff keeping their jobs.

If this cannot be done the employees will either be sent to work at other Co-op businesses or made redundant and given help finding new jobs.

Clifford Conway, president of Brighton and Hove Chamber of Commerce, said he was disappointed the Co-op had missed out on the first tranche of sales but there was still hope for the site.

He said: "There is a genuine concern for London Road but if you're coming into Brighton from the north this is the first major stopping point for shopping."

Keith Taylor, Green councillor for St Peter's and North Laine, said if the store did close it could become a focus for the community.

He said: "I think there is a fantastic opportunity there.

"It could be developed as a retail space for fairtrade, not-for-profit or organic traders.

"There are also a lot of needs for things such as creche facilities in that district."