Thomas Cook has dismissed a weekend report that it is considering “plans to close hundreds of shops”.
A Thomas Cook spokeswoman said: “There is no substance at all to the story” – which appeared in the Sunday Times.
The group is poised to merge its UK retail outlets with The Co-operative Travel and Midlands Co-operative to create a chain of more than 1,200 travel agencies and has consistently said no more than about 75 shops will close as a result. The deal could be signed off by the Competition Commission any time between now and October.
The Sunday Times claimed Thomas Cook “is expected to rethink the number of shops it needs”. However, the spokeswoman told Travel Weekly: “We have said we will close 75 when the deal goes through.” She added: “We have said the strategic review will look at the multi-channel [distribution] business.”
Thomas Cook announced a “fundamental review” of its UK business following a profits warning in July. In a statement in early August – on the day Manny Fontenla-Novoa stepped down as chief executive – the group identified “the efficiency of our retail network” and “the size and structure of the airline” as among the areas the review would examine.
The spokeswoman confirmed the review is looking at the airline, including the size of the fleet, but said: “No decisions have been taken.”
The merger with the Co-ops has been touted as a means to increase both in-house distribution and margins, since more high-margin package holidays are sold through shops than other channels. However, industry commentators have questioned the wisdom of acquiring such a sizeable chain of stores during a consumer downturn.
Members of the Thomas Cook board – led by chairman Michael Beckett, acting chief executive Sam Weihagen and chief financial officer Paul Hollingworth – sought to demonstrate confidence in the group last week by purchasing more than 775,000 shares in the company.
The share price fluctuated wildly through last week along with the market, losing 16% on Monday, regaining 17% on Tuesday and climbing 6% on Friday to leave shares trading at 55.6p at the week’s end – giving Thomas Cook a market capitalisation of just under £487 million. Further fluctuations are expected.
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