[UK] Store closures loom after Next loses £30m legal battle

In the UK, the clothing chain Next has warned that its shops "will no longer be viable" after a legal battle and could face closure, Yahoo News reports.

In August, Next lost a legal case over equal pay. It is set to appeal against the court's verdict in which more than 3,500 current and ex-employees won their claim after a six-year battle.

According to reporting from The Sun, lawyers at Leigh Day estimate that Next will need to pay employees £30 million in backdated wages. 

On September 19, bosses reportedly told investors that the ruling could affect Next's ability to keep stores "individually profitable," potentially leading to branches closing down. Lord Wolfson - Next's chief executive - warned that if the tribunal's ruling remains in place the High Street retailer could be forced to shut stores due to concerns over costs.

Last month, an employment tribunal ruled that the retailer must pay its predominantly female store staff the same hourly rates as its primarily male warehouse workers. 

In a statement, the company said, “In the possible (but unlikely) event we lose this case on appeal, there will be a financial cost to the group and its ongoing future operating costs.”

“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. Inevitably some of our stores will no longer be viable if this ruling is upheld on appeal," it added.

“Materially increasing store operating costs will result in more shops being closed when their leases expire, and will materially impede our ability to open new stores going forward.” 

Next also reportedly stated that the case could impact the "viability of our warehouse operation" if it cannot increase pay for workers at these sites.

The retailer told The Sun that its legal team was "very confident of our grounds for appeal", however, it stressed the process may not conclude for at least a year.

Source: Yahoo News (via BirminghamLive)

(Link and quotes via original reporting)

In the UK, the clothing chain Next has warned that its shops "will no longer be viable" after a legal battle and could face closure, Yahoo News reports.

In August, Next lost a legal case over equal pay. It is set to appeal against the court's verdict in which more than 3,500 current and ex-employees won their claim after a six-year battle.

According to reporting from The Sun, lawyers at Leigh Day estimate that Next will need to pay employees £30 million in backdated wages. 

On September 19, bosses reportedly told investors that the ruling could affect Next's ability to keep stores "individually profitable," potentially leading to branches closing down. Lord Wolfson - Next's chief executive - warned that if the tribunal's ruling remains in place the High Street retailer could be forced to shut stores due to concerns over costs.

Last month, an employment tribunal ruled that the retailer must pay its predominantly female store staff the same hourly rates as its primarily male warehouse workers. 

In a statement, the company said, “In the possible (but unlikely) event we lose this case on appeal, there will be a financial cost to the group and its ongoing future operating costs.”

“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. Inevitably some of our stores will no longer be viable if this ruling is upheld on appeal," it added.

“Materially increasing store operating costs will result in more shops being closed when their leases expire, and will materially impede our ability to open new stores going forward.” 

Next also reportedly stated that the case could impact the "viability of our warehouse operation" if it cannot increase pay for workers at these sites.

The retailer told The Sun that its legal team was "very confident of our grounds for appeal", however, it stressed the process may not conclude for at least a year.

Source: Yahoo News (via BirminghamLive)

(Link and quotes via original reporting)