Mar 27, 2003/ FWD/ -- "Chicago" may have cleaned up at Sunday's Oscars, but the real Windy City proved less of a draw for British department store Harrods than the movie version was for film lovers.

Harrods, under the direction of Egyptian owner Mohammed Al-Fayed, had planned to open its first proper branch outside of London as the anchor tenant in a landmark development on Chicago's State Street. The site, at 108 North State, was formerly known as Block 37.

After much wooing by the Illinois city, the luxury retailer accepted the invitation to open there over a year ago. But it seems that relations between developers and Al-Fayed soured, with the businessman refusing to take more than a tenth of the 300,000 square feet earmarked for his store. He is also rumored to have wanted to build a hotel on the site and to have a say in the overall look and content of the development.

A spokesperson for the Knightsbridge, London, store commented, "In the latter part of last year we saw the negotiations reaching a point where Harrods' aspirations and those of the developers were poles apart. The developer seemed unaware of the fundamental brand value associated with Harrods and this was reflected in their proposed scheme."

For the time being, Harrods retail outlets are limited to the London flagship as well as a selection of small stores selling Harrods-branded goods at airport terminals in the UK, mainland Europe and Malaysia. Harrods products are also sold on the QE2 cruise liner, the TVSN home-shopping channel in Australia and in a number of department stores in Singapore, Hong Kong and Japan.

Harrods' financial results have been less than stellar in recent years, with the last figures available dating from 2001. And Al-Fayed's personal investment, the London-based Fulham Football Club, posted losses of 24 million pounds in the year to June 30, 2001 -- thought to be the biggest ever recorded in British football history.