US fashion giant Forever 21 is expanding its Oxford Street flagship store by acquiring the adjacent unit occupied by Desigual currently.

The move comes after the retailer decided to downsize its Birmingham Bull Ring store, which was the first of its stores to open in 2010.

Forever 21 exchanged contracts today, sources close to the situation told Retail Week. It is understood the deal is part of the retailer’s “commitment to the UK and Europe”.

Forever 21 opened the 38,000 sq ft Oxford Street store last year after paying a premium to HMV to obtain the lease, as revealed by

Spanish fashion retailer Desigual opened its Oxford Street store last year, following its debut on Regent Street. Desigual agreed a deal to pay £710 per sq ft for the Oxford Street store, previously occupied by Disney. At the time it was the highest ever rent agreed on the famous shopping street

Property agent Harper Dennis Hobbs acts for Forever 21.