Home Business News Asos to repay furlough money to the government as lockdown sales hit £1bn

Asos to repay furlough money to the government as lockdown sales hit £1bn

by LLB staff reporter
15th Jul 20 2:18 pm

Asos have said they will repay the furlough money back to the government as they saw a surge in lockdown sales amounting to £1bn.

The online retailer said that they saw an increase in demand and that shoppers bought more “lockdown products.”

In the four months to the end of June Asos told investors that their total sales jumped by 10% to £1bn.

The retailer is still remaining “cautious” of demand in the short term amid, “the backdrop of continued social distancing, ongoing restrictions of events and an uncertain economic outlook.”

Nick Beighton, chief executive of the company, said: “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.

“We have learnt a lot and adapted quickly, and Asos finishes the period with improved underlying profitability.

“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 and to return to positive free cash flow for the full-year.”

William Ryder, equity analyst at Hargreaves Lansdown said, “Asos customers have adapted to lockdown life by buying fewer dresses and more casual and active clothes.

“This has allowed the group to keep selling but has come at the cost of gross margins and growth has only really shone in regions where the lockdown has been relaxed.

“Costs have also risen as warehouses were adapted for social distancing, but overall Asos expects profitability to rise as marketing and promotional activity continues to be cut.”

Sin early morning trading shares in the company were up by 3.8% at 3,500p.

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