Billionaire retail entrepreneur and new Arcadia chief, Philip Green, has begun slashing the fashion giant’s cost base by slapping a retrospective 1.25 per cent price cut on clothing suppliers.

In a letter to the company’s 200-plus suppliers Green, who took the reins at Arcadia last month with an £850 million bid, also increased the number of days taken to pay suppliers from 28 to 30.

He is also reported to have introduced an additional 1.5 per cent reduction from suppliers in return for the axing of a system of fines imposed by Arcadia on suppliers who break trading terms.

Media reports on Sunday claimed the move will land Green and his family a "windfall" of around £8m as Arcadia currently has outstanding invoices worth an estimated £60m.