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Bloomberg
Inditex SA shares dropped after the owner of the Zara clothing chain agreed to raise the pay of its store workers in Spain by an average of 20%.
The retailer agreed to pay all store workers in Spain a minimum of €1,500 ($1,610) per month, Spanish union UGT said in a statement. That’s a hike of up to 40% for workers in provinces with the lowest wages. Inditex, which also owns brands Bershka, Pull&Bear and Oysho, has about 27,000 store workers in the country, according to a company spokesperson.
The stock fell as much as 3.5% in Madrid. The salary boost represents €167 million of additional costs, wrote Bankinter analyst Elena Fernandez-Trapiella.
Before the deal, store employees’ salaries varied by province. Spain’s monthly minimum wage is 1,080 euros.
The announcement comes after the retail giant agreed in December to a 25% pay increase for store workers in its hometown of A Coruña following strikes that shut several stores on Black Friday.
Inditex has also agreed to other benefits, such as a monthly stipend for childcare or for the care of dependent family members.