'No reprieve for staff' after Thomas Cook refinancing deal

'No reprieve for staff' after Thomas Cook refinancing deal

There will be no reprieve for Thomas Cook UK staff facing redundancy from next month despite the group's announcement of a major refinancing deal this morning.

Thomas Cook UK and Continental Europe chief executive Peter Fankhauser said: "All the plans remain the same."

The company is currently in consultation with representatives of 3,000 staff, with 2,500 jobs due to go when the consultation ends in June. Most are in Thomas Cook's UK retail division as the company plans to close 195 shops.

Fankhauser said there would be no change to the plans despite the group securing £425 million in financing through a rights issue.

Thomas Cook also announced it had secured £691 million in long-term banking facilities, with €525 million to be raised through a new bond issue.

However, Fankhauser said no further job cuts are planned.

He said: “All the plans remain the same. We now have to deliver and increase our performance. Part of that is through streamlining our processes and increasing efficiency by introducing IT.”

Picking up on group chief executive Harriet Green’s drive to achieve 50% of sales online by 2015, up from 35% currently, Fankhauser said: “We decided we could either follow or set the pace. We have chosen the latter.

"This is where our customers want to find us and it’s where we are going to have a more compelling offering.”

However, he insisted: “More compelling does not mean cheaper.

"There will be different product that customers call up on their screens which they can then select from according to their exact wishes."

This would be possible thanks to a joint venture with Triperati which Fankhauser described as a “dream find” and extremely well-financed deal.

Asked why Thomas Cook needed a third party tech company to inspire its customers to travel to different destinations and could not do it itself, he said it would have taken years to do it in-house. The deal would mean Cook could offer better search technology instantly, he said.

Fankhauser said the plan is for a seamless link between the web and Cook's 870-shop retail network. This is already in place in 10 branches, including Cook's concept store in Leeds. A second is due to open in Edinburgh.

Currently, Thomas Cook shops do not have ability to track customers through different channels.

He could not give a timescale for the technology's introduction, but said it would be “soon”.

Fankhauser said UK trading had gone well so far this year and he believed today’s financing announcement would give clients even more confidence about travelling with the company.

He said the financing made Thomas Cook “fully stable to 2020”.

Fankhauser conceded that the need to secure the refinancing and reduce debt had been distracting for the group. Today's announcement would allow the company to focus full attention on clients, he said.

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