Arcadia’s Sir Philip Green is setting up an international entertainment company with music mogul Simon Cowell, marking the retail boss’s first foray into the showbiz world.

The new company will be based in London and Los Angeles and will concentrate on television production, talent management and merchandising.

It is not known what the company will be called or when it will launch.

Green will take responsibility for finances, strategy and merchandising while Cowell will present and produce the shows.

A source told The Telegraph: “”He’s been working on this throughout the night in recent weeks, speaking to people in LA on the phone constantly, and smoking 40 a night.

“This is going to be a multi-billion dollar international business. This isn’t some hobby venture on the side.”

One friend of Sir Philip said that he will not be stepping back from retail as a result. “His foot is still firmly on the High Street pedal,” the friend said.