The impending closure of the Homeward Bound store on Bank Street is seen as a blow to local merchants and business leaders who considered it an anchor for the downtown shopping district.

"I think it's going to be a real loss for the downtown,'' said Jayson Roberts, president of the Village Center Organization and co-owner of Village Center for the Arts on Main Street. "(Homeward Bound) was a mini-anchor store.''

But no one feels the pain more than its owners, Kathy Walsh and her husband, Trip Rothschild.

"It is sad,'' Mr. Rothschild said Tuesday of the high-end furnishings, decor and clothing store that will end its four-year run by mid-September.

Economic realities forced their hand, Mr. Rothschild said.

The store catered to an upscale clientele that can afford finer quality merchandise. But during the past two years, those customers stopped buying these wares, he said.

The New Milford Homeward Bound store is the couple's second store. Their original Homeward Bound, located on Route 7 in Great Barrington, Mass., closed a year ago.

They opened two more stores -- one in West Hartford in 2007 that will close this weekend and one in Madison that opened last June and closed in December.

"It wasn't an overnight decision,'' Mr. Rothschild said about closing the Bank Street store, which once housed Hart's 5 & 10.

"This recession, unlike ones in the past, has created a major change in psychology even among people who still have a lot of disposable income,'' he observed.

Mr. Rothschild said customers have told him how much they will miss the store and the staff, yet their spending history "hasn't been very much.''

"People are fearful, and that's understandable,'' he said.

Mr. Rothschild said specialty stores are losing money.

"No one walks into Homeward Bound as a necessity," he explained. "You have to want it or see a reason to want it.

"We had beautiful things you could find no other place, but you have to value that," Mr. Rothschild said. "People are just not in the mood to pay for things like that.''

Jeanne Street, who owns Sassy Shoe on Bank Street, sent a letter to other downtown merchants, lamenting the imminent loss of Homeward Bound.

"As many of us wander the streets the past few days, there is a sadness in the air about the closing of a neighboring store, Homeward Bound,'' Ms. Street wrote. "In these economic times, it is the saddest realization that we are, in fact, in a crisis.''

Ms. Street and Mr. Rothschild are distressed that "going out of business'' sales now seem to attract customers to specialty shops.

"We cannot compete with T.J. Maxx or Walmart, and why would we want to?'' Ms. Street said. "The whole purpose of having a boutique is to have unique items that you cannot find in a mall or discount shop.''

In the past month, downtown business leaders and merchants have welcomed the opening of a couple of small businesses, as well as a soon-to-open Bank Street Tavern -- across the street from Homeward Bound -- and offices.

However, Homeward Bound's departure will leave vacant the anchor store on Bank Street, just as the anchor store on Main Street in New Milford has remained vacant since CVS moved to East Street.

The energetic Ms. Walsh was always seeking new ventures, not just for her store but for the downtown village, said Vin Nolan, the town's economic development supervisor.

Ms. Walsh positioned her shop as a focal point for downtown business activities, Mr. Nolan related, and she was the driving force behind the first Bank Street Festival last Columbus Day weekend.

Whether they will continue that kind of community involvement remains to be seen, Mr. Rothschild said, adding that he and his wife are assessing their options.

Mayor Patricia Murphy said she will miss the store and its owners, but she thinks its reputation will lead to another quality tenant.

"I'm hoping their store is an example of what can be in the downtown,'' Mayor Murphy said.