Green combines Arcadia brands in new Milton Keynes store

Sir Philip Green's Arcadia retail group has signed up for its first new store to combine its Bhs homewares range with his Arcadia brands in a newly signed store.

It will open in a development close to the Milton Keynes football stadium, joining retailers such as Marks & Spencer and Primark.

The development is being funded by record producer-turned-football club chairman Pete Winkelman and insurer Aviva Investors. It is also to be the location of Primark's first out-of-town store.

Sir Philip has been closing some of his Bhs stores to reduce costs. He sold the lease to its Aylesford store in Kent to Irish toy chain Smyths Toys recently. He sold 10 Bhs stores in January 2010 to Primark and has held talks to sell another batch but no deal has yet been done.

He is also moving Arcadia brands such as Dorothy Perkins, Burton and Evans into existing Bhs stores to save rent by closing the smaller shops where leases are coming to an end.

The clothing sector is finding trading particularly challenging. Despite many new entrants to the sector – from Forever 21 to The Kooples – some stores are finding it too tough. Esprit is thought to be planning to close eight of its 11 UK stores.

Last week young Irish fashion chain A-Wear was bought by restructuring experts Hilco from private equity group Alchemy. Hilco plans to expand the chain in Northern Ireland. It has 39 stores throughout Ireland and three in the UK as well as online and wholesale business.