Clothing chain Hollister has changed its uniform policy to allow its staff to wear poppies in the run-up to Remembrance Day.
It follows a disagreement at its Southampton store when a staff member was told to remove her poppy but refused to.
Harriet Phipps, 18, said the assistant manager told her to take it off because it was not part of the uniform.
Hollister said staff may now wear poppies in the run-up to the day.
After learning of the row between Ms Phipps and the manager, the firm responded by saying it did have a "strict dress code" but staff were allowed to wear a poppy on Remembrance Day itself.
Miss Phipps said she wore her poppy in honour of a friend currently serving in Afghanistan.
She had initially refused to take it off when told to, but was made to feel so "uncomfortable" she eventually did.
A spokesman for the clothing chain, which is owned by US giant Abercrombie and Fitch, said: "In the three years we have operated in the United Kingdom, we are not aware of any similar incidents of associates being told they could not wear a poppy.
"Having now better understood the issue, we have informed our associates that we fully support anyone who wishes to wear a poppy between now and Remembrance Day."
Describing the incident, Ms Phipps earlier told the BBC it had made her "very upset" and "so angry".
It is not the first time Abercrombie and Fitch has been involved in a disagreement with staff over its uniform policy.
In August 2009, following a tribunal, a disabled woman was awarded £8,000 for unlawful harassment after she was made to work in the stockroom of the company's Savile Row store in central London after wearing a cardigan to cover her prosthetic arm.