The vast store on Princes Street in Edinburgh will close next month after 24 years of trading. The move is made even more significant as the building also houses John Menzies' head office, though this will be retained.
The company is opening a much smaller store in the city's Cameron Toll shopping centre instead.
Steve Robinson, John Menzies' retail managing director, said: "Moving from Princes Street means the end of an era but a 27,000 square feet store just does not fit in with our new trading formula, which we believe is much better for our customers."
Industry experts say John Menzies is suffering similar problems to the WH Smith chain as it finds its high street shops undermined by the supermarkets and specialist chains such as Waterstone's Dillons and Our Price Music.
The Princes Street store employs 70 staff, of which 50 will be transferred to the new Edinburgh outlet.
The company hopes to employ most of the remaining employees at its other stores in the area. It has extended its lease at Princes Street for its head office requirements.
The remaining floors will be taken over by the fashion chain Next, which is currently operating separate men's and women's stores up the road. It is thought that these will close and be moved under one roof in the old Menzies unit.
Under chief executive David Mackay, John Menzies is attempting to regroup after a disastrous 1995-96 when it issued two profits warnings.
One related to problems at its news distribution division. The second was caused by difficulties at its Early Learning Centre children's stores.
- Nigel Cope