Asos to repay furlough money as lockdown gross sales rise

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Asos will repay money to the federal government it claimed for furloughing employees after its gross sales grew in lockdown.

The on-line retailer stated that group gross sales elevated by 10% to £1bn within the 4 months to 30 June.

The rise was pushed by consumers in worldwide markets, with gross sales within the UK dipping by 1%.

It got here as luxurious style model Burberry introduced a droop in gross sales and 500 job cuts, and Dixons Carphone warned of weakening shopper spending.

In its buying and selling replace, Asos stated that it could be returning money it obtained below the federal government’s furlough scheme after a “higher than initially-expected full-year efficiency”.

“This has been a troublesome time for all companies, however we now have remained targeted on doing the best factor for our individuals,” Asos boss Nick Beighton stated.

It didn’t affirm what number of employees it had furloughed below the federal government’s job retention scheme, the place the federal government pays 80% of employees’ salaries as much as £2,500 monthly, or the price.

UK retail gross sales fell by 1% to £329m within the interval, however worldwide gross sales, significantly in Europe, have been sturdy, up 17% to £654m.

Mr Beighton added: “While we stay cautious concerning the shopper influence of Covid-19 trying ahead, we’re on monitor to ship sturdy year-on-year revenue progress.”

‘Pandemic winner’

Analysts credited the agency’s on-line infrastructure with the stable of set of outcomes.

Julie Palmer, companion at Begbies Traynor, stated: “It’s clear that the net retailer is a pandemic winner.

“However, with a deep recession looming, and the hopes of a V-shaped restoration seemingly dashed by yesterday’s financial progress figures Asos, in addition to the remainder of the retail sector, should put together for a squeeze on shopper spending.

“This is the place the present goes calm earlier than the waters flip uneven.”

Burberry cuts jobs

Other retailers reported grim gross sales figures on Thursday, after they have been hit by the slowdown in shopper spending amid the coronavirus pandemic.

Luxury British style model Burberry noticed gross sales practically halve within the three months to the tip of June, together with a 75% drop in Europe and the Middle East.

As a results of the droop in gross sales, the corporate stated it could lower 500 jobs worldwide and search to make financial savings of £55m.

About 150 workplace jobs are anticipated to go within the UK, with an extra 350 abroad.

The transfer will have an effect on about 4% of its 3,500 workers within the UK, though it stated that retail and manufacturing jobs wouldn’t be affected.

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Richard Hunter, head of markets at Interactive Investor, stated: “Burberry is operating arduous to face nonetheless for the time being, though there are some grounds for optimism.

He identified that Asia, the place the Covid-19 pandemic originated, being a key marketplace for the agency was a “double-edged sword”.

He stated this “resulted in an early hit to gross sales however equally is now seeing some profit from a steadily bettering backdrop.”

Dixons Carphone warning

Dixons Carphone additionally warned that it anticipated a “weakening” in spending later this yr.

Although the electronics retailer reported a surge in on-line gross sales, earnings within the 53 weeks to 2 May fell to £166m from £339m the yr earlier than.

Dixons Carphone group chief govt Alex Baldock stated: “Since the yr finish, all our electricals companies have continued to develop gross sales.

“Where our shops have reopened we have carried out properly, whereas persevering with to see sturdy on-line gross sales progress. That stated, we anticipate a weakening of shopper spending later this yr and are being cautious in our planning.”

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