Fashion retailer, Next, has warned that stores may have to close if it loses its appeal against a landmark equal pay ruling. An employment tribunal found that 3,500 predominantly female shop staff had been discriminated against by being paid less than predominantly male colleagues doing similar work in warehouses. Next’s half-year results showed that stores would not be viable if the ruling is upheld on appeal. However, profit forecasts for the current trading year were lifted to almost £1bn ($1.22bn).
If the appeal is rejected, Next could be forced to pay over £30m ($36.7m) to current and former employees. Next argues that wider labour market standards mean warehouse staff earn more than shop staff, but noted that if its appeal fails, there would be a significant knock-on effect for the company’s financial costs and operating future costs.
While Next plans to appeal the ruling, it also released its half-year results, revealing that sales rose by 8% to £2.9bn ($3.55bn) in H1 while pre-tax profits increased by 7.1% to £452m ($553.63m). Next also lifted its full-year profit guidance by £15m ($18.35m) to £995m ($1.22bn).
The firm attributed success in the first half of the year to the rise of streaming services such as Netflix, Amazon Prime, and TikTok. The overseas market was targeted, with customers in Japan, China, and Australia among others. Next noted that “global entertainment is exposing people to international fashion trends in a way they never have been before”, and saw a 67% increase in sales in the Americas. Though it launched its own branded overseas products, merchandise from firms recently acquired, including Friends Like These, Cath Kidston, and Reiss, also fuelled online sales performance. However, in the UK, sales of its own-branded clothing fell by 0.9% thanks to cooler summer weather than in the previous year
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