High street giant Next is facing possible store closures following a significant legal defeat related to equal pay. The retailer intends to challenge the ruling that favoured over 3,500 former and current employees, who claimed they were underpaid in comparison to warehouse workers due to sex discrimination. Next, led by chief executive Lord Wolfson, plans to appeal the decision but acknowledges the potential closure of stores due to increased costs if the appeal is unsuccessful.
The group’s half-year results highlighted the financial implications, stating that individual stores must remain profitable to continue operating. The company expressed concerns that a loss in the legal battle could lead to the closure of unviable stores and hinder future store openings. Additionally, the ruling may impact the viability of the warehouse operation if worker pay cannot be adjusted accordingly.
While Next remains optimistic about its grounds for appeal, the legal process could extend for at least a year. This ruling sets a precedent as the first successful equal pay claim against a national retailer, potentially paving the way for similar claims. Notably, approximately 60,000 Asda employees are pursuing a comparable case that has been ongoing for a decade and is now with an employment tribunal.
Despite the legal setback, Next has revised its profit outlook upwards for the second time in less than two months and expects prices to decrease for autumn and winter ranges. The group reported a rise in underlying pre-tax profits and total sales, with overseas sales performing notably well. UK sales were affected by lower demand for seasonal collections, particularly within the Next brand, but have shown improvement since the half-year mark.
Looking ahead, Next anticipates a rise in sales for the year overall and has adjusted its full-year profit guidance upwards. The company aims to continue offering competitive pricing by further reducing prices for autumn and winter products. With the ongoing legal battle and evolving market conditions, Next appears focused on navigating challenges while maintaining financial stability and operational efficiency.