Sir Philip Green, the retail entrepreneur behind Topshop, is to merge two of his biggest companies, the Telegraph has reported.
Arcadia and Bhs are to become one, with the latter reporting to the former and operating as one brand.
The newspaper has reported that senior staff were told the news yesterday.
It is expected that there will be some job losses from the move, which will see Bhs combine its logistics, finance and marketing departments with Arcadia's.
James Hall, the retail editor at the website, said that a trial in Peterborough where a larger outlets housed a multitude of brands was likely to be the "blueprint for the changes".
The Arcadia group is behind such brands as Topshop, Topman, Miss Selfridge and Dorothy Perkins.
Bhs was bought by Sir Philip from Storehouse in 2000, followed by the Arcadia group in 2002.
The Telegraph reported that he was unavailable for comment, but an Arcadia spokesperson said that they were "looking to use the group's resources in the best way possible".
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