Next Plc warned it may have to close stores if it loses an appeal over an equal pay ruling, in a landmark case for UK retailers.
The British fashion outlet said there will be financial consequences if a ruling over its workers’ pay is upheld. An employment tribunal said last month that Next’s shop-floor staff, who are mostly women and paid lower hourly rates, were at a particular disadvantage compared with men working in warehouses.
“Each of our stores is treated as a business in its own right, and must remain individually profitable if they are to open in the first place and continue trading at lease renewal,” the company said in its half-year results Thursday. “Inevitably some of our stores will no longer be viable if this ruling is upheld on appeal.”
Law firm Leigh Day & Co., which is representing the claimants, has said they’re entitled to more than £30 million ($39.7 million) in back pay, due to wage gaps that it’s argued are as high as £3 an hour.
Next CEO Simon Wolfson stressed his company’s argument in a media conference following the results. “Anything that’s done to increase costs, whether that’s wages or rents or rates, all the things that push up costs are likely to have an impact of the viability of some of the stores.”
Next is one of the UK’s most successful retailers, with annual profits nearing the £1 billion mark and a share price that has climbed almost 80 percent in the last two years. It has 455 stores in the UK and Ireland.
Attention has focused on equal pay law amid a drawn out battle in the courts against Britain’s largest supermarkets. Asda Group Ltd., J Sainsbury Plc, WM Morrison Supermarkets Ltd., Co-operative Group Ltd. and Tesco Plc all face similar claims to Next, with the total potential bill for backpay estimated by lawyers to be in the billions.
By Jennifer Creery
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