MARKS & Spencer's flagship Lifestore in Gateshead will close this week amid speculation that the site is to be taken over by Danish retail company Ilva.

The £40m retail experiment, which opened in February last year in a fanfare of publicity, is closing on Friday after costing the troubled retailer tens of millions of pounds in less than a year.

Ilva, which has a string of stores in Scandinavia, is thought to be on the verge of signing a deal to take over the freehold of the site, but M&S was saying little about the possible agreement.

An M&S spokeswoman said: "Negotiations on the future of the store are ongoing, but it is confidential information. We cannot say anything more at this stage."

Ilva is planning to open a number of stores around the UK in the next decade, including a site at Piccadilly Basin, in Manchester, which has already been secured.

In Scandinavia, the retailer is a rival of Ikea, which has a store only 300 yards from the MetroCentre Lifestore.

The Lifestore was heralded as exciting and groundbreaking when it opened on February 25 last year.

The 70,000sq ft outlet was opened under the direction of former Selfridges boss Vittorio Radice.

Its centrepiece was a full-sized, two-storey house designed by architect John Pawson as a display set for the products on offer.

However, the concept failed to ignite much interest in shoppers and chief executive Stuart Rose announced last summer that the store, which was intended to be followed by other branch openings in Lakeside, West Thurrock, and Kingston-upon-Thames, London, would close in the new year.

Published: 05/01/2004