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| Asos to repay furlough cash as lockdown sales rise | Asos to repay furlough cash as lockdown sales rise |
| (30 minutes later) | |
| Asos will repay cash to the government it claimed for furloughing workers after its sales grew in lockdown. | 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 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%. | 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. | 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. | 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." | 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' | 'Pandemic winner' |
| Analysts credited the firm's online infrastructure with the solid of set of results. | 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. | 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. | "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." | "This is where the current goes calm before the waters turn choppy." |
| Burberry cuts jobs | |
| Other retailers reported grim sales figures on Thursday, after they were hit by the slowdown in consumer spending amid the coronavirus pandemic. | Other retailers reported grim sales figures on Thursday, after they were hit by the slowdown in consumer spending amid the coronavirus pandemic. |
| Luxury British fashion brand Burberry saw sales nearly halve in the three months to the end of June, including a 75% drop in Europe and the Middle East. | Luxury British fashion brand Burberry saw sales nearly halve in the three months to the end of June, including a 75% drop in Europe and the Middle East. |
| As a result of the slump in sales, the company said it would cut 500 jobs worldwide as it sought to make savings of £55m. | As a result of the slump in sales, the company said it would cut 500 jobs worldwide as it sought to make savings of £55m. |
| About 150 office jobs are expected to go in the UK, with a further 350 overseas. | |
| The move will affect about 4% of its 3,500 employees in the UK, although it said that retail and manufacturing jobs would not be affected. | |
| Richard Hunter, head of markets at Interactive Investor, said: "Burberry is running hard to stand still at the moment, although there are some grounds for optimism. | Richard Hunter, head of markets at Interactive Investor, said: "Burberry is running hard to stand still at the moment, although there are some grounds for optimism. |
| He pointed out that Asia, where the Covid-19 pandemic originated, being a key market for the firm was a "double-edged sword". | He pointed out that Asia, where the Covid-19 pandemic originated, being a key market for the firm was a "double-edged sword". |
| He said this "resulted in an early hit to sales but equally is now seeing some benefit from a gradually improving backdrop." | He said this "resulted in an early hit to sales but equally is now seeing some benefit from a gradually improving backdrop." |
| Dixons Carphone warning | |
| Dixons Carphone also warned that it expected a "weakening" in spending later this year. | Dixons Carphone also warned that it expected a "weakening" in spending later this year. |
| Although the electronics retailer reported a surge in online sales, profits in the 53 weeks to 2 May fell to £166m from £339m the year before. | Although the electronics retailer reported a surge in online sales, profits in the 53 weeks to 2 May fell to £166m from £339m the year before. |
| Dixons Carphone group chief executive Alex Baldock said: "Since the year end, all our electricals businesses have continued to grow sales. | Dixons Carphone group chief executive Alex Baldock said: "Since the year end, all our electricals businesses have continued to grow sales. |
| "Where our stores have reopened we've performed well, while continuing to see strong online sales growth. That said, we expect a weakening of consumer spending later this year and are being cautious in our planning." | "Where our stores have reopened we've performed well, while continuing to see strong online sales growth. That said, we expect a weakening of consumer spending later this year and are being cautious in our planning." |