The New West End company, which represents retailers on Oxford Street, said the area remained key for retail and hospitality in London.
Some retailers welcomed the move, with John Lewis, whose flagship store has been on Oxford Street since 1864, calling the nearly three-century-old highway the "nation's high street".
Khan said the plan was to get rid of all traffic, including bicycles, in the one-mile stretch from Oxford Circus to Marble Arch. The London mayor's office has not specified how buses that use the east-west road will be rerouted.
Stuart Love, chief executive of the local Westminster City Council, said the authority wanted more details on how concerns of residents and shoppers over rerouted transport and access would be addressed.

Ron Harold-Hurst, a pensioner from Bromley, south east London, said he was against pedestrianising the street.
"It's a terrible idea," the 83-year-old said. "You need buses don't you? How are you going to get from one end to the other?"
The plan needs final approval from Rayner who is also Britain's housing and communities minister.
British Prime Minister Keir Starmer's Labour Party has said it wants to accelerate the process of approving projects to speed up Britain's economic growth.
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