LONDON (Reuters) - Leading British sportswear retailer JD Sports Fashion (JD.L) said it would review employment policies at its main distribution centre after undercover reporters raised concerns about working conditions at the site.
The firm, which reported record first-half profit in September, said on Thursday it would investigate allegations made in a Channel 4 News report, including a claim from workers that conditions at its Kingsway facility in northern England “were worse than a prison”.
The Channel 4 News expose came a year after a newspaper investigation shone a critical light on the treatment of staff at rival Sports Direct (SPD.L).
JD, whose shares fell 7 percent in early trading before recovering to trade up 0.7 percent by 1035 GMT, said it would retrain all supervisory and security staff at the facility as a matter of urgency. Around 1,500 people work at Kingsway, close to the city of Manchester in northwest England.
Iain Wright, chair of parliament’s business committee, told Channel 4 News he was disgusted by its findings and said JD’s management should explain itself in front of members of parliament.
British lawmakers criticised Sports Direct in July for “appalling” working conditions “closer to that of a Victorian warehouse than that of a modern retailer”.
JD, which has a market value of 3.1 billion pounds after its stock rose 51 percent this year, said it was “deeply disappointed and concerned by the footage”, which included one team leader saying that staff could be sacked on the spot for sitting down - an allegation the firm denied.
“Our employees are vital to our business, so we take any such allegations very seriously,” it said.
“As a result, we will undertake to conduct a review of all our policies, their communication and implementation at the site.”
Peel Hunt analyst Jonathan Pritchard, who has a “Buy” stance on JD, believes the firm had handled the issue well.
“We think that JD’s mature response to the problem will ensure that it does not snowball as an issue,” he said.
“As for the impact on the business, we think that it will be negligible...We continue to believe that current trading is very strong here.”
Reporting by Kate Holton and James Davey; Editing by Paul Sandle and Keith Weir