High street retailer Next is facing possible store closures after losing a significant legal case concerning equal pay. The company recently lost a case involving more than 3,500 current and former workers, who won their claim following a six-year legal battle. An employment tribunal ruled that Next had failed to justify paying sales consultants a lower basic wage compared to warehouse operatives, determining that the pay disparity was likely due to sex discrimination.
Next plans to appeal the decision, expressing confidence in a favourable outcome. However, the company warned that if the appeal fails, increased costs could force them to shut some stores. In its half-year results, Next stated that any store must remain profitable to continue operations. If the ruling is upheld, higher store operating costs could make certain locations financially unviable, particularly when leases are renewed.
The retailer also noted potential challenges for its warehouse operations if it cannot raise wages to attract enough workers. Next’s legal team remains optimistic, but the appeal process could take over a year to conclude. The ruling marks a major victory in equal pay claims, potentially opening the door for further similar cases, with 60,000 Asda workers pursuing a comparable claim.
Despite the legal battle, Next raised its annual profit forecast, reporting a 7.1 per cent increase in underlying pre-tax profits to £ 452 million for the six months ending 27th July, with total sales up 8 per cent.
