Asos to repay furlough cash as lockdown sales rise

Asos will repay cash to the government it claimed for furloughing workers after its sales grew in lockdown.

The online retailer said that group sales increased by 10% to £1bn in the four months to 30 June.

The rise was driven by shoppers in international markets, with sales in the UK dipping by 1%.

It came as luxury fashion brand Burberry announced a slump in sales and 500 job cuts, and Dixons Carphone warned of weakening consumer spending.

In its trading update, Asos said that it would be returning cash it received under the government’s furlough scheme after a “better than initially-expected full-year performance”.

“This has been a tough time for all businesses, but we have remained focused on doing the right thing for our people,” Asos boss Nick Beighton said.

It did not confirm how many workers it had furloughed under the government’s job retention scheme, where the government pays 80% of workers’ salaries up to £2,500 per month, or the cost.

UK retail sales fell by 1% to £329m in the period, but international sales, particularly in Europe, were strong, up 17% to £654m.

Mr Beighton added: “While we remain cautious about the consumer impact of Covid-19 looking forward, we are on track to deliver strong year-on-year profit growth.”

‘Pandemic winner’

Analysts credited the firm’s online infrastructure with the solid of set of results.

Julie Palmer, partner at Begbies Traynor, said: “It’s clear that the online retailer is a pandemic winner.

“However, with a deep recession looming, and the hopes of a V-shaped recovery seemingly dashed by yesterday’s economic growth figures Asos, as well as the rest of the retail sector, will have to prepare for a squeeze on consumer spending.

“This is where the current goes calm before the waters turn choppy.”

Source – BBC News