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 “from February 1st 2018 on all existing and future orders”.
Grabiner wrote: “I know this is not news that you would wish to hear but we have absorbed significant costs in technology, distribution and people… in order to remain competitive in the global market and we trust you will continue to support us.
He cited “huge changes in the retail market” 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: “This is Arcadia up to its old tricks…The retail market is tough enough as it is without this.
“A 2% discount could be quite a significant hit. It wouldn’t surprise me if this move pushed some suppliers over”.
An Arcadia spokesman said: “This is a normal commercial request to our suppliers and reflects the very significant investments that we are making in the business”.