ONE of the US's biggest fashion retailers is to shut its flagship Scottish store with the loss of around 200 jobs.

Forever21, which has had a presence in Scotland for less than three years, has told staff it is closing its outlet on Glasgow's Buchanan Street.

It comes amid a raft of closures and downsizing by the firm which describes itself as "the fifth largest speciality retailer in the United States" and which has around 10 per cent of the country's clothing market.

The firm has already closed its Manchester store and is expected to also withdraw from a number of other UK locations.

However, rival fashion retailer H&M has announced it will take on the unit in the city's Buchanan Quarter, while its other store in the nearby Buchanan Galleries will house some of its other brands, it is understood.

The building's owners said there had been immediate demand for the site once Forever21 signalled their departure. One leading retailing source said the move was indicative of internal problems for the US firm rather than a sign of major problems within the Glasgow sector.

However, the move has left scores of staff unemployed. Ahead of its opening Forever21 was recruiting for upwards of 150 staff.

One staff member, who asked not to be named, said she has been working at the store for over a year but now feared the sudden prospect of unemployment

She said: “I think staff should have been given much more notice of the store closing.

“The shop is always fairly quiet but when you work for such a famous, international chain you never really worry that you might lose your job.

“I’m not sure when my last day will be but it’s pretty grim. I’m not sure what people plan to do next but I’ve already started job hunting."

Another said: "I just received a phone call and was told something about them selling the site as they;d had an offer. I work part-time but there's about 200 people there."

The Herald attempted to contact Forever21 at its California headquarters but it did not respond.

A spokesman for the property's owner, Land Securities, said: “Immediately following the Forever 21 decision to exit we received strong interest in the store on Buchanan Street and subsequently let the unit to H&M as a flagship.

"H&M will retain the Buchanan Galleries which they will rebrand in due course. The strong demand for the space reinforces Glasgow city centre's position as the UK's top retail destination outside London."

Reports in recent weeks from the US have said Forever21 has been in contact with landlords about downsizing some of its biggest stores.

The Wall Street Journal reported claims its sales and profit had tapered off after years of strong growth and that "the company has stumbled by expanding into cavernous stores that it had trouble filling productively".

The retailer has also struggled with large stores outside the US and had secured a loan which it said could also be used to buyout leases at struggling European stores.

Late last year it was reported that it had reduced its losses in the UK to £18.4m pre-tax, down from the £66.5m recorded last year.

While hugely successful in the US it has faced competition in the UK from European heavyweights such as Zara and H&M as well as UK chain Topshop.

Meanwhile, H&M said its new Glasgow store, which will open in the winter, will lead to the creation of 30 jobs and include the firm's home, beauty and sports ranges.

H&M’s country manager Carlos Duarte said: “We are delighted to be relocating to 185 Buchanan Street. This is a very exciting opportunity to expand our brand. The store will offer something for everyone, no matter your age, budget or personal style.”

A Forever 21 spokeswoman said: “Forever 21 is constantly evaluating our portfolio of stores and has proposed one recent store closure in Glasgow.

"We made the proposal to close this store after careful consideration of the long-term profitability of the particular location.

"Forever 21 operates multiple stores across Europe, where our customers will continue to have access to the fast fashion they have come to love and expect from Forever 21.”