Sir Philip Green, the owner of BHS and Arcadia Group, is to merge the two companies in a bid to make better use of store space and cut costs.
The move comes against the backdrop of a severe retail downturn in which BHS has fared worse than some of the brands in the Arcadia stable, such as Topshop.
While there will be job losses, Sir Philip said he would not close one of the two London head offices and the primary motivation was not to cut costs by cutting jobs.
'It’s a combination of product, store space, the brands we own,' he said. 'In the market we’re now living with are there better ways to use the space? Can we be more opportunistic?'