Arcadia Group has dealt a “significant hit” to clothing suppliers by demanding a lower price for any orders made, in signs the fashion giant could be struggling.
According to ITV News, Arcadia’s chief executive Ian Grabiner penned a letter to its suppliers stating that from February 1 it would be imposing a two per cent discount on all its orders.
Although retailers that fall under the Sir Philip Green-owned Arcadia umbrella – including Topshop, Dorothy Perkins, Miss Selfridge and Burton – do not make their financial figures public, Grabiner said the move was due to the group already absorbing “significant” costs.
While it is likely to save Arcadia tens of millions, alarm bells have been raised by the Forum of Private Business (FPB) – a group which represents over 18,000 small businesses who criticised the retailer for making the same demands in 2015.
“This is Arcadia up to its old tricks… The retail market is tough enough as it is without this,” FPB chief executive Ian Cass told ITV News.
“A two per cent discount could be quite a significant hit. It wouldn’t surprise me if this move pushed some suppliers over”.
An Arcadia spokesperson said: “We recently asked our suppliers for a small increase in our discount terms.
“The cost of servicing and delivering to our customers through new channels is considerably higher than through the traditional retail marketplace.
“This has resulted in major investment in our infrastructure in terms of systems and distribution as well as a large headcount increase. These substantial developments to our business will mutually benefit our suppliers.”