Coronavirus: ASOS to repay government furlough money after lockdown sales increase

ASOS has said it will repay the money it claimed from the government furlough scheme after sales shot up during lockdown.

The online retailer said it will give back the £1.8m it received for furloughing workers during the coronavirus crisis, having outperformed many of its struggling competitors.

With its High Street rivals forced to close during COVID-19 lockdown, ASOS sales increased by 10%, totalling £1.01bn - up from £919.8m last year - in the four months to 30 June.

UK sales fell by 1%, but international ones were up by 17%, with the brand faring particularly well in Europe where lockdown restrictions were lifted sooner.

Its active customer base increased by 16% to 23 million people and the number of items sold also went up by 15%, the fashion site added.

Chief executive Nick Beighton said despite concerns about the impact of social distancing on socialising and events, ASOS is aiming for healthy annual profits for 2019/20.

He added: "We are on track to deliver strong year-on-year profit growth and to return to positive free cash flow for the full year."

The firm, particularly popular with shoppers in their 20s, has also been able to increase warehouse capacity since lockdown eased.

But its rivals Boohoo and Quiz have been forced to rethink their supply chains over major concerns about slave-like working conditions at factories in Leicester.

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Earlier this month, Boohoo promised to independently review its supply chain after a Sunday Times investigation uncovered claims workers were being paid as little as £3.50 an hour.

Women's fashion brand Quiz has suspended a Leicester-based supplier after reports it was paying staff £3 an hour.

The national minimum wage for people over-25 is £8.72.

ASOS shares rose by 4.4% following today's announcement.

William Ryder, equity analyst at Hargreaves Landsdown, said: "ASOS intends to return the taxpayer's cash it received under the furlough scheme as trading has been stronger than anticipated, which shows confidence.

"Customers have adapted to lockdown life by buying fewer dresses and more casual and active clothes.

"It's a strong sign that the group will be able to keep growing, and that the brand is powerful enough for customers to come looking for different items."

The decision comes after Primark refused the government's £30m bonus offer for bringing its 30,000 staff back from furlough.

The budget store said the bonus scheme "should not be necessary" and could encourage other major High Street names to make the same move.