Arcadia has told suppliers that it is cutting the price it is willing to pay for the orders placed.
Arcadia chief executive Ian Grabiner told suppliers of the decision in a letter seen by ITV News.
In the letter, Grabiner said that Arcadia, which owns businesses such as Topshop and Dorothy Perkins, would impose a 2% discount āfrom February 1st 2018 on all existing and future ordersā.
Grabiner wrote: āI know this is not news that you would wish to hear but we have absorbed significant costs in technology, distribution and peopleā¦ in order to remain competitive in the global market and we trust you will continue to support us.
He cited āhuge changes in the retail marketā as justification for the discounts. Arcadia, which is owned by tycoon Sir Philip Green, is having to cope with higher costs and adapt as retail increasingly shifts online.
However, some suppliers reacted with anger.
Forum of Private Business chief executive Ian Cass told ITV News: āThis is Arcadia up to its old tricksā¦The retail market is tough enough as it is without this.
āA 2% discount could be quite a significant hit. It wouldnāt surprise me if this move pushed some suppliers overā.
An Arcadia spokesman said: āThis is a normal commercial request to our suppliers and reflects the very significant investments that we are making in the businessā.
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