A planning proposal to turn 3 St Denys Road currently occupied by Portswood Cycles into a three-storey block of flats, has been refused by the council.
Managing director Eric Lane had previously said that the cycle store, whose lease expires in 2015, would move to another location should the plans get approval.
Planners reportedly said that the proposed scheme would undermine the vitality and viability of the Portswood district centre.