Online retail giant ASOS to pay back furlough cash (£1.8m) to government

Online retail giant ASOS to pay back furlough cash (£1.8m) to government

The FINANCIAL -- Asos announced that would be returning the cash it received under the government's furlough scheme as it released trading statement. In a statement issued online, the company revealed that it’s able to make the payments thanks to ”a steady improvement in sales”. Active customer base increased to 23m, +16% year on year, with particularly strong growth in new international customers. 

Online fashion giant Asos will repay the money it claimed under the Treasury's furlough scheme after revealing its sales hit £1billion over lockdown. The fast-fashion company said it's on track to meet its annual forecast, after sales rose 10% in the four months to June 30, when store-based rivals were forced to close shops due to coronavirus restrictions. In April, Asos raised £247million in new equity to shore up its finances. The furlough repayment is expected to be about £1.8 million, Mirror reported.

Chancellor Rishi Sunak said the furlough scheme would be extended by a further four months with workers continuing to receive 80% of their current salary. The scheme will continue in its current form until the end of July and the changes to allow more flexibility will come in from the start of August. More specific details and information around its implementation will be made available by the end of this month. New statistics revealed the job retention scheme has protected 7.5 million workers and almost 1 million businesses.

Online fashion and cosmetic retailer 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, BBC wrote.

In a statement issued online, the company revealed that it’s able to make the payments thanks to ”a steady improvement in sales” during March, April, May and June. The online retailer revealed that group sales had risen by 10 per cent to £1 billion in that time period, according to The Independent.

Asos stated that Improved profitability and cash generation delivered despite the Covid-19 demand and supply impacts as they continue to focus on our non-strategic cost agenda.

Nick Beighton, CEO, commented: “This has been a tough time for all businesses, but we have remained focused on doing the right thing for our people and our customers and making sure that we emerge from the current crisis as a stronger and better organisation. I am particularly proud of the resilience, flexibility and creativity the ASOS team and our business partners have shown."

In March of 2020, The GMB - General trade union in the United Kingdom accused Asos of “playing Russian Roulette with people’s lives” as they refuse to enforce social distancing in packed warehouses amid the Coronavirus crisis. Workers reported no social distancing measures, a complicated clocking in a system which means large numbers of people gathered in a small area, and hundreds of workers were breaking for lunch at the same time.

Burberry also announced first quarter trading according to which, Asia Pacific declined 10% in the quarter but returned to growth in June. Within this, Mainland China grew mid-teens in Q1 but grew ahead of the January pre COVID level of 30% in June, supported by some repatriation of sales due to the COVID-19 travel restrictions. The Americas declined 70% impacted by lockdown measures. However, following the easing of restrictions, trends have improved significantly into June.

"Throughout Q1 2021 COVID related government restrictions eased allowing the gradual reopening of our retail store network from peak closures at the end of March. This underpinned a progressive improvement in our comparable retail sales growth with June declining around 20% compared to a 45% decline for the total quarter," is written in Burberry's statement.

Author: The FINANCIAL

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