Business

Asda grows again after three-year slump

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Asda logoImage copyrightGetty Images

Asda Supermarket chain Asda has reported its first quarterly like-for-like sales growth for three years.

Sales rose 1.8% in the second quarter after a bumper Easter, Asda owner Walmart said.

The figures were boosted by a combination of price cuts, more customers and rising inflation.

Removing the benefit of Easter from the results, Asda’s like-for-like sales were 0.7% higher.

Last year Asda reported its worst quarterly performance on record when sales tumbled by 7.5%.

Walmart chief executive Doug McMillon said the world’s biggest retail was “encouraged” by the UK result.

“In June, I visited Asda to see the progress being made. Customers are responding to investments in price and store experience by visiting the stores more often and increasing their basket sizes,” he said.

“There’s still much more to be done, but we’re clearly headed in the right direction.”


Analysis: Emma Simpson, BBC business correspondent

Is Asda finally on the road to recovery? It’s been a painful few years.

They’re not popping the champagne corks in Leeds just yet.

If you strip out the Easter effect, Asda’s growth was 0.7% on a comparable basis to last year.

And it highlighted this figure in its financial update for good reason. Bosses want to dampen down expectations for the quarters to follow.

So how much of this figure is driven by inflation, which is giving a lift to all the supermarkets right now?

Well I’m told that 0.7% would still be positive even if you strip out the effects of inflation at Asda.

In other words there’s finally some growth in shopper numbers and volumes coming through.

But Asda’s growth is still way behind the other main players. This is a business that’s still got a huge amount to do.


Asda is the third-largest UK supermarket chain behind Tesco and Sainsbury’s, according to Kantar Worldpanel.

Chief executive Sean Clarke took over from Andy Clarke last summer.

His strategy to try to halt falling sales has involved focussing on lowering prices.

Asda said that its second quarter had seen “one of its most successful Easter trading periods on record”, with total sales up 16%.

Mr Clarke said 275,000 new customers shopped at Asda in the second quarter, but added: “We know we need to continue to up our game to be in the best shape possible.”

In the first quarter the chain suffered a 2.8% sales decline – its eleventh consecutive quarterly drop.

Meanwhile, Walmart reported lower quarterly margins after it cut prices and invested in expanding online sales. The retailer’s shares were down 3% in pre-market trading in New York.

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Pain in Spain: Are tourists still welcome?

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A man walks past a "Tourists Go Home" graffitti on a wall close to the City Hall in Oviedo, northern Spain,Image copyrightEPA

Visitors to Barcelona may be expecting some hostility after the anti-tourism protests that have shaken one of Spain’s biggest holiday destinations.

On arriving at the city’s airport, they may notice signs that all is not well.

But any protesters with raised fists are more likely to be striking airport workers in pursuit of better pay and working conditions.

Spanish Civil Guards have been called in to handle security as the indefinite stoppage goes on.

Once the tourists arrive in the city centre, they are likely to notice anti-tourist graffiti or signs telling them that rents are now unaffordable for locals because of the demand for holiday accommodation.

They may even be physically attacked, as reportedly happened to at least one group of tourists who had eggs thrown at them.

Such campaigns are now being seen elsewhere in Spain, the world’s third-biggest holiday destination, including the Basque city of San Sebastian, where an anti-tourism march was being held on Thursday.

The tourism industry is concerned at the potential global effect.

“Tourism is of immense economic benefit to European destinations and has become even more important in recent years,” says a spokesperson for Abta, the UK travel agents’ association.

“Most people appreciate these benefits and accept that at certain times of year, they will have to share their cities with significant numbers of tourists from around the world.”

‘Manage numbers’

Abta, perhaps unsurprisingly, blames the problem on the rise of online services such as Airbnb, which threaten its members’ traditional business model while promoting a huge expansion in illegal tourist accommodation in cities such as Barcelona.

Image copyrightAFP
Image caption Campaigners have helpfully translated their message for tourists

“The rapid growth of the peer-to-peer economy in recent years has led to significant increases in visitors to some cities, but due to the lack of licensing and regulation in this sector, it is impossible to fully understand tourism numbers,” it says.

“We need mechanisms in place to manage numbers in crowded destinations, for the benefit of holidaymakers, destination residents and the travel industry. Logically, these measures would need to take account of both hotel visitors and peer-to-peer accommodation users.”

Abta may have a point, though. According to some estimates, as many as 40% of Barcelona’s tourist apartments are being rented out without the authorities’ permission, making it much harder for local people to find affordable accommodation.

For now, tour guide operators and other local businesses say privately that the anti-tourist backlash has made little difference to the influx of visitors.

And the Spanish government must be hoping they are right.

More than 75 million tourists visited the country last year, and the number is expected to hit a record 83 million in 2017.

With Spain still recovering from its crippling economic crisis, tourism is more important to national well-being than ever before.

‘Cookie-cutter’ tourism

Lucy Fuggle, head of content at TrekkSoft, which provides logistics and software to travel firms, sees the discontent as a sign that tourism needs to change. “The backlash is concerning, but more so for the sentiment than the economic impact,” she says.

Image copyrightEPA
Image caption A cheap holiday in other people’s misery?

“Tourism will continue – there’s no doubt about that – but we see some changes that need to happen, such as improved regulations and better distribution of visitors across cities.

“In our work with tour and activity suppliers and tourism boards, we’ve noticed that visitors are increasingly seeking unique experiences in less ‘typical’ destinations,” Ms Fuggle says.

“It’s a step away from the cookie-cutter package trip, and if more visitors turn to this, we could see less dense distribution in struggling cities such as Barcelona and Venice. It comes at a greater cost to the consumer than budget city breaks, however.”

Future fears

It’s probably too late for the protesters to have much impact on this year’s tourism numbers.

The surge in visitor numbers is being fuelled by powerful global economic forces. As the appeal of other once-popular destinations such as Tunisia, Turkey and Egypt is waning because of security concerns, Spain looks even more attractive as a haven for sun-worshippers.

But the impact of the anti-tourist campaign could well be felt in 2018 and beyond.

The Catalan Tourist Board is a regular exhibitor at London’s World Travel Market tourism fair, held every November, along with 11 other Spanish travel organisations.

After some bumper years, the Spanish tourism industry will have to work hard to ensure that it too does not fall out of fashion.

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Asda reports first rise in sale in three years

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Britain’s third biggest supermarket, owned by US retail giant Walmart, said like-for-like sales rose by 1.8%, excluding petrol, in the three months to 30 June.

This compares with a 2.8% fall in the first quarter of this year, which was an eleventh straight decline.

It is a big turnaround when compared to this time last year, when the supermarket chain suffered its worst ever quarterly result with sales plummeting by 7.5%.

Walmart president and CEO Doug McMillon said he was “encouraged” by the results.

“I visited Asda to see the progress being made,” he said. “Customers are responding to investments in price and store experience by visiting the stores more often and increasing their basket sizes.”

He added: “There’s still much more to be done, but we’re clearly headed in the right direction.”

The second-quarter data comes just weeks after the Leeds-based company revealed a disastrous set of results for 2016.

It reported a 3.2% fall in revenue to £21.7bn in the year to 31 December, while pre-tax profits plummeted by almost 19% to £791.7m.

Accounts filed at Companies House also showed like-for-like sales, excluding fuel and VAT, fell by 5.7%.

However, the supermarket said it was seeing early signs of a turnaround under its new boss Sean Clarke.

Asda said in September last year that it was lowering thousands of prices on everyday favourites by an average of 15% as well as improving the quality of own-brand ranges.

It has been feeling the brunt of the ferocious price war engulfing the supermarket sector as it vies with “big four” rivals Tesco, Sainsbury’s and Morrisons for a share of the market being gnawed away by discounters Aldi and Lidl.

Earlier this year, Walmart said it was throwing more of its global buying power behind Asda to help it beat rivals on price.

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Top Shop bosses out of fashion in Arcadia shake-up

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People walk past Topshop, Oxford StreetImage copyrightGetty Images

Top Shop is the jewel in the crown of billionaire Sir Philip Green’s retail empire.

But with the chain losing its sheen amid tough competition there are fresh attempts to keep it ahead of the game.

In the latest shake-up at Sir Philip’s parent company Arcadia, Top Shop’s creative boss Kate Phelan is leaving, as is Top Man’s Gordon Richardson.

Arcadia has announced that they will be replaced in a combined role by former Vogue art director David Hagglund.

In addition to this latest creative appointment, a new chief executive starts next month – Paul Price.

It signals a new era for Top Shop, once the go-to destination for young shoppers keen to snap up the very latest fashion trends on the High Street.

Profits at Arcadia, which also includes Miss Selfridge, Burton, and Dorothy Perkins, plunged by 79% last year.

Tough competition in the clothing market – and the failure of the now-defunct BHS chain – contributed to the poor performance.

Ms Phelan moved to Top Shop from fashion magazine Vogue in 2011, and Mr Richardson has been at Top Man for 17 years.

Image copyrightGetty Images
Image caption Sir Philip Green’s retail empire includes Top Shop and Top Man

In Arcadia’s statement, Sir Philip said: “The appointment of David Hagglund, in the newly combined role, continues to mark the start of a new era for Topshop Topman in moving both brands forward in their ongoing global expansion.

“I am delighted to welcome David who will be joining Paul Price, our new chief executive, on the same day and I look forward to working with them both to drive the business forward.”

Top of their agenda will be Top Shop’s future. Nimbler online rivals such as Boohoo and Misguided are eroding Top Shop’s market share. They’re cheaper, too.

Online retailer Boohoo saw profits double in April thanks to new overseas markets.

And online fashion retailer Asos has also been eating Top Shop’s cake, with sales jumping in its latest results.

We will have to wait and see whether Top Shop seeks to move upmarket, or tries to up its game in the fiercely competitive online world.

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Rank Group adapts to the digital age

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Founded by the legendary J Arthur Rank in 1937 as the Rank Organisation, it was one of the UK’s biggest names in film, owning the Pinewood and Denham studios and, later, the Gaumont British and Lime Grove studios, as well as more than 600 cinemas across the country that eventually ended up trading under the Odeon banner.

The famous “man with the gong” sequence with which it opened its films heralded the start of many of the Carry On series and classics such as Laurence Olivier’s Henry V and David Lean’s Oliver Twist.

It later diversified into skating rinks, restaurants, a highly profitable joint venture with the US photocopying giant Xerox and, in 1972, bought the Butlin’s holiday camp business.

This was followed in 1990 by the acquisition of Mecca Leisure, the bingo and casinos operator once headed by Eric Morley, creator of the Miss World beauty competition.

Ever since, though, conglomerates have fallen out of fashion and Rank has, bit by bit, sold off many of those old businesses.

Woman plays bingo in Glasgow, Scotland
Image:Visits to Mecca bingo halls dropped last year from 11.6 million to 10.5 million

Today, the renamed Rank Group – it changed its name 11 years ago – has just three businesses: the Mecca bingo chain, which is the market leader; Grosvenor Casinos, Britain’s largest casino operator; and Enracha, a Spanish-based bingo, slot machine and sport betting operator.

Having fallen out of the FTSE-100 as long ago as September 1998, it is now a much smaller business than it once was, with a stock market valuation of just £916m.

And it is now 56.1% owned by Guoco Group, the investment vehicle of Malaysian billionaire Quek Leng Chan, who tried unsuccessfully to take full control in 2011 but nonetheless emerged as the majority shareholder.

The company’s latest results, published today, point to a business that is still going through immense change. Full year sales dropped very slightly, from £708.5m to £707.2m, but pre-tax profits on an underlying basis rose by 2% to £79.3m.

The big challenge faced by Rank, which two years ago teamed up with online gaming group 888 Holdings in a failed takeover bid for bookmaker William Hill, is how it continues adapting to the digital age.

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Video:Online gambling firms face crackdown

The number of people visiting their local casino or bingo club is falling – visits to Mecca dropped last year from 11.6 million to 10.5 million – and Rank is responding by shutting underperforming outlets.

Mecca closed its doors last year in West Bromwich and Bradford. Both businesses have also faced higher costs, for instance, in the form of the national living wage.

The good news is that those customers who are still going to the bingo are spending more. Rank has also introduced innovations to keep them spending, such as enabling customers to order food and drink on their phone to be delivered to their table, as well as special events targeted at specific groups of customers like students. A new bingo brand, Luda, has also opened.

Similarly, it is refurbishing its casinos, as well as stepping up investment in the websites of both Mecca and Grosvenor and has been extending, online, into areas like sports betting. This is the future of Rank: operating profits in its digital arm shot up by 63% last year.

The recent history British business is littered with examples of companies that failed to move with the times. Rank faces an awful lot of headwinds, not least a growing sense that the gaming sector faces more regulation, but its recent progress suggests it will not be one of them.

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UK retail sales growth continues in July

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Supermarket shopperImage copyrightReuters

UK retail sales increased in July as stronger spending on food offset a fall in the purchase of other goods, according to official figures.

The volume of sales grew by 0.3% compared with June, the Office for National Statistics (ONS) said.

However, the figure for June’s retail sales growth was revised down from 0.6% to 0.3%.

The latest data shows that the volume of food sales rose by 1.5% in July, having fallen by 1.1% in June.

The ONS said all other sectors saw a fall in volume sales apart from household goods.

Ole Black, ONS senior statistician, said that overall it was a “relatively subdued picture” in retail sales”.

“Strong food sales have been responsible for the growth of 0.3% in July compared with June, as all other main sectors have shown a decrease. Whilst the overall growth is the same as in June, trends in growth in different sectors are proving quite volatile,” he said.

‘Extraordinarily resilient’

However, Ruth Gregory, UK economist at Capital Economics, said the July figures were “fairly encouraging given the recent intensification of the squeeze on consumers’ real incomes and suggest that talk of a sharp consumer slowdown has been overdone”.

She said there had been few signs of a sharp slowdown in spending growth away from the high street.

“What’s more, with annual retail sales values growth remaining at a still strong 4.1% in July, this suggests that consumers haven’t been tightening their belts as a result of Brexit uncertainty,” she said.

Ben Brettell, senior economist at Hargreaves Lansdown, said the figures showed the UK consumer was “extraordinarily resilient”.

“Spending has defied expectations of a slowdown since the Brexit referendum, and currently seems to be holding up despite weak wage growth and above-target inflation,” he added.

“This could bode well for economic growth – the UK economy is heavily reliant on the consumer, and economists had expected falling real incomes to eventually translate into weak retail sales.”

However, the continuing difficulties for retailers was underlined on Thursday when Kingfisher reported a 1.9% fall in like-for-like sales for the three months to 31 July.

The group’s operations include DIY chain B&Q, whose sales fell 4.7%.

Image copyrightKingfisher

PwC economic advisor, Andrew Sentance said the underlying picture on the High Street remained one of “subdued growth”.

“Consumers may also be becoming more cautious about spending because of the political uncertainty following the General Election and surrounding the Brexit process.

“However, the main factor squeezing consumers is the weakness of the pound against other major currencies which is pushing up import prices and fuelling inflation,” he added.

“UK consumers are watching and waiting – for inflation to subside and for the post-Brexit to become clearer. Until there is some relief on these two key issues, subdued growth of retail sales looks set to continue through this year and into 2018.”

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Cornish fish restaurant named best in the UK

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Nathan Outlaw in chef's clothingImage copyrightPA
Image caption “If you stay true to yourself, get your head down, look after your customers and use the very best ingredients available to you, you’ll make it to the top,” said Outlaw

A Cornish fish restaurant has been named best in the UK, after five years at the top for the previous winner.

The Good Food Guide put Port Isaac’s Restaurant Nathan Outlaw, named after its owner, just ahead of Cumbria’s L’Enclume, ending its winning run.

Traditional favourites such as The Ritz and Heston Blumenthal’s The Fat Duck still feature in the top 50 list.

Outlaw described the news as “phenomenal” and attributed the success to the “hard work of the team”.

The 39-year-old chef founded the two Michelin star restaurant in 2007 and first made it on the list in 2009 at number 11.

Good Food Guide editor Elizabeth Carter said: “Nobody seems to leave Nathan Outlaw’s staff – they just go and work in another one of his restaurants.

“They obviously think he’s a pretty good boss as well as a fine chef.”

Despite losing the top slot, Simon Rogan’s L’Enclume in Cartmel retained its perfect 10 score.

Pollen Street Social in London, Restaurant Sat Bains in Nottinghamshire and The Fat Duck in Berkshire came in at third, fourth and fifth, each scoring nine.

Image copyrightPA
Image caption Stark’s Ben Crittenden was named “chef to watch”

Stark, a 12-seater restaurant in Broadstairs, Kent, is so pushed for space that it does not have a toilet. Diners can instead pop up the road to the local pub.

Despite its lack of facilities, its chef, Ben Crittenden, has been named “chef to watch” by the Guide.

Peter Sanchez-Iglesias won the chef of the year title for the seasonal cuisine he serves at Casamia in Bristol, which was tenth on the list.

The Good Food Guide, published by Waitrose, started ranking the UK’s restaurants in 1951.

Each year it assembles a long-list from thousands of recommendations sent in by the public.

It then sends out inspectors to each of the chosen restaurants, where they assume the guise of regular customers before reporting back on their experience.

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Daily Stormer: Cloudflare drops neo-Nazi site

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Media playback is unsupported on your device
Media caption The Daily Stormer has been a source of significant controversy in recent days

A neo-Nazi site that disparaged a woman who died during protests in Charlottesville has faced another wave of rejection by web companies.

The Daily Stormer’s account with Cloudflare – which protects websites from distributed denial of service (DDoS) attacks – has been terminated.

Cloudflare’s chief executive Matthew Prince said he had “had enough”, in a company email obtained by Gizmodo.

However, he added that he felt conflicted over the decision.

“Literally, I woke up in a bad mood and decided someone shouldn’t be allowed on the internet,” wrote Mr Prince.

“No-one should have that power.”

On Sunday, the Daily Stormer published an article denigrating Heather Heyer, 32, who was killed after a car rammed into protesters against a far-right rally in Charlottesville, Virginia.

This led to a backlash in which the site had to switch domain name registrars twice in 24 hours, after GoDaddy and Google both removed it from their services.

Cloudflare’s service involves handling web users’ requests to view a site and filtering out those that appear to be coming from systems set up to overload the site.

Without such protection, websites can sometimes be knocked offline.

Mr Prince said leaving the site open to DDoS attacks could lead to “vigilante justice”, in a blog post published later on Wednesday.

However, he also said: “Our terms of service reserve the right for us to terminate users of our network at our sole discretion.

“The tipping point for us making this decision was that the team behind Daily Stormer made the claim that we were secretly supporters of their ideology.”

Media playback is unsupported on your device
Media captionEXPLAINED: What is a DDoS attack?

Earlier in the week, the Daily Stormer was set up as a site on the dark web and later relocated its open web presence to a Russian domain name ending “.ru”.

A spokesman for the Russian media watchdog Roskomnadzor said it had asked web firm Ru-Center to shut this down.

A BBC check on Thursday morning found that the .ru address no longer appeared to be working.

The Daily Stormer has faced frustration elsewhere in recent days.

Three Twitter accounts associated with the site that had previously been active were suddenly listed as “suspended” on Wednesday.

And cyber-security researcher Joseph Evers announced that he had stopped hosting an internet chat channel he said was used by staff at the Daily Stormer.

Describing himself as having once been a “free speech absolutist”, Mr Evers added: “I’m glad to do my small part in countering white supremacy.”

Donations blocked

Besides the Daily Stormer’s case, this week Paypal reiterated its stance on blocking donations to organisations that promote hate, violence or racial intolerance.

“This includes organizations that advocate racist views, such as the KKK, white supremacist groups or Nazi groups,” the payment-processing firm said.

Internet companies were facing a “dilemma” over how to balance support for freedom of speech with a desire not to encourage hate groups, said Prof Eric Heinze, at Queen Mary, University of London.

“Had the Charlottesville events not occurred, the hate sites would still be operating from Cloudflare, GoDaddy, and other such venues,” he told the BBC.

“Some might call it satisfactory to wait until actual harm occurs before closing such a site. But others will say that’s too little and too late.”

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Spending on food boosts July retail sales

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Shop sales rose by 0.3% – the same as June, when the Office for National Statistics revised down its preliminary figure of 0.6%.

But the figure was a shade above economists’ forecasts of 0.2%.

Growth was underpinned by strong food sales, which picked up by 1.5%, recovering from a drop of 1.1% in the previous month, as other areas except household goods fell, the ONS said.

In addition, the annual rate of sales volumes stood at just 1.3% in July, down from 2.8% in June.

The figures come hot on the heels of economic data earlier this week, which showed the rate of inflation comfortably outpacing the speed by which wages are growing.

The knock-on effect of that is that people’s spending power is slowly being eroded.

Inflation remained unchanged in July at 2.6%, but above wage growth and the Bank of England’s target of 2%.

Wages grew by 2.1% compared with the same period last year, the ONS said on Wednesday.

Once inflation is taken into account, total pay in real terms sank by 0.5% both including and excluding bonuses.

Ole Black, ONS senior statistician, said: “The underlying trend at the beginning of 2017 showed a relatively subdued picture in retail sales.

“Whilst the overall growth is the same as in June, trends in growth in different sectors are proving quite volatile.”

Chris Williamson, chief business economist at IHS Markit, said: “Subdued retail sales growth in July reflected an ongoing deterioration in household finances, linked in turn to low pay, rising prices and concern about the outlook.

“The data add weight to calls for the Bank of England to hold off with higher interest rates, as increased borrowing costs will add further pressure to family budgets.”

However, UK economist at Capital Economics Ruth Gregory, said the July figures were “fairly encouraging given the recent intensification of the squeeze on consumers’ real incomes and suggest that talk of a sharp consumer slowdown has been overdone”.

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HBO investigating latest Twitter hack

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Several HBO Twitter accounts sent a message on Wednesday night purporting to be OurMine hackers, responsible for attacks on Netflix and Facebook creator Mark Zuckerberg.

Twitter accounts from shows such as Last Week Tonight with John Oliver, Veep and Vinyl all tweeted a message saying: “Hi, OurMine are here, we are just testing your security, HBO team please contact us to upgrade the security”.

HBO regained control of the accounts within less than an hour, and is now investigating the hack.

OurMine is a group of hackers that claimed to have gained control of several social media accounts of important people, including Google’s chief executive and the co-founder of Wikipedia.

The latest hack comes as HBO has been the victim of numerous attacks by hackers and inside leaks.

HBO Tweet
Image:HBO Tweet

Last month, hackers going by the collective name Mr Smith stole 1.5 terabytes of data from HBO, resulting in several scripts, unaired episodes and other information being released online.

Since then, they have been trying to blackmail the network’s CEO by releasing more batches of episodes, which include Larry David’s Curb Your Enthusiasm and the Duplass brothers’ Room 104.

It also included scripts from Game Of Thrones, but no actual episodes.

This week, four people were arrested in India in an unrelated case, where employees from a data company with access to Game Of Thrones episodes were accused of releasing them online.

On Tuesday, HBO Spain mistakenly made available next week’s episodes of the show for an hour – enough for users to download it and release it online.

It was not immediately clear if Wednesday’s Twitter hack was related to any previous attacks.

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