Shares in Zara owner Inditex (ITX.MC) fell as much as 4.7% on Friday after the world’s biggest fast fashion retailer agreed an inflation-busting 20% increase in average wages for shop workers in its home market of Spain.
Spain’s two largest unions, CCOO and UGT, announced the pay increase late Thursday, with UGT saying salaries were set to rise as much as 40% in some parts of the country.
Inditex, which employs about 165,000 people in 177 countries, with a third of all staff based in Spain, did not respond to a request for comment. About 86% of staff work in its 6,477 shops and most are women.
The pay hike is part of a “process of homogenisation” of working conditions for staff in Inditex’s different brands, according to the agreement document signed by Inditex and unions seen by Reuters.
As well as Zara, Inditex owns eight brands in Spain including Massimo Dutti, Pull & Bear and Bershka.
The move establishes a marker for Inditex rivals in Spain that are still negotiating wage increases, unions said, and could prove a headache for businesses and policymakers trying to keep a lid on inflation.
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