They’ve also introduced a 1.5 per cent pay rise across the board and overhauled their redundancy agreements, offering more entitlements to older workers - welcome news in the face of the rumoured store closures.
Under the new deal, workers over the age 45 will have their maximum redundancy pay increased from 12 to 20 weeks after 10 years' service. Meanwhile, other workers’ payouts will increase from 12 to 16 weeks' pay.
The AFR goes on to suggest that by their conservative estimates, ‘the retailer set for a $30 to $40 million jump in its labour costs once it restored award rates, excluding any annual pay rises.’
This is obviously a crisis for Big W bosses, who are already under the microscope after losing $110 million last financial year and $8 million in the first half of 2019.
The declining profits lead Macquarie Wealth Management to suggest in a client note that Big W may be forced to close a third of its stores.
‘Given significant closure costs for the portfolio, a more likely scenario is Woolworths to close up to one-third of its stores (60 stores), in our view. This cost could be around $759 million.’
It added that regional stores my big hit hardest as ‘It is unlikely these locations will enable Big W to regain the momentum required for profitability.’
A spokeswoman for Big W said a final decision had not been made yet about store closures.
‘At our half-year results in February we announced a national review of our Big W store and distribution centre network,’ she said.
‘The review is ongoing and no decisions about our network have been made. We will update our team members and the market once the review has been completed.’
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