Hyde’s on Market Street, Chorley, will close on Saturday but retain an online business.
The business blamed online shopping, business rates and Market Walk competition for the closure.
In a statement, owner Gerry Hyde said: “Hyde’s Toys of Chorley was opened in 1990. It was the first store we opened and where our business started.
“It is therefore heartfelt that we have decided to close the store on April 30.
“We feel over the years we have become part of the community and realise the store will be sadly missed by our customers, especially the children and therefore warrants our explanation. The store has been non-profitable for the last two years and even with a reduction in rent and rates the store failed to make a profit.
“The three main reasons for this are; the substantial shift from high street to online shopping, no reduction in business rates to reflect the shift from high street to online shopping and the extra competition from the larger discount stores within the Market Walk.”
Malcolm Allen, chairman of Chorley Traders’ Alliance, said: “Obviously we are sad to see an independent business go in Chorley. It’s just an ongoing battle against the stores who have extended credit facilities with suppliers.
He added: “Business rates are a problem. The government have given us a reduction for the last two years, but this year, every high street store has to fund another £30 at a time when consumers aren’t spending as much due to the economic outlook.”