Navigate to Masterfile > SKU Listing.
Search the for SKU. Click on the SKU and click "Edit SKU".
Scroll down and locate the "Active" button.
Untick the "Active" box and key in the reason in the box next to it.
Scroll to the bottom and click on Update when complete to deactivate the SKU.
Once Updated, the SKU will appear in the SKU Listing as shown in the image below.