Yahoo Finance Sir Philip Green's Arcadia imposes discount on suppliers in bid 'to remain competitive'
Topshop owner Arcadia has told suppliers it is imposing a 2pc discount on future orders and orders it has already placed, blaming the changing retail environment.
Arcadia's chief executive Ian Grabiner said, in a letter to suppliers, that the group had "absorbed significant costs in technology, distribution and people".
Because of this, "in order to remain competitive in the global market", Arcadia had decided to impose a 2pc discount across all current and future orders from Feb 1. The move is likely to save Arcadia, owned by Sir Philip Green, millions in costs.
A spokesman for Arcadia 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 market place.
"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.”
News of the letter to suppliers, first reported by ITV, follows a tough festive period for retailers, with a flurry of profit warnings among high street names including Debenhams and Moss Bros.
The torrid Christmas comes after inflation pushed prices up over the period, with shoppers reining in spending and unsecured debt at a record high of £205.8bn. The number of retailers who collapsed into administration ticked higher in 2017, for the first time in five years.
However, online retailers have, largely, managed to stave off the decline. Boohoo, the online retailer which recently signed a deal with TV star Kourtney Kardashian, lifted sales guidance last week as revenues doubled in the run up to Christmas.
