The world’s oldest travel group Thomas Cook has announced it will close almost 200 stores with the loss of 2,500 UK jobs as it struggles to return to profitability. The group said most of the job losses will come from its retail network and back-office functions.
For the last financial year to September, the group reported pre-tax losses of £485.3m. The travel group blamed the loss on a “difficult trading environment” and increased fuel costs, despite the previous closure of 149 stores.
Thomas Cook’s chief executive for Europe and the UK, Peter Fankhauser, said: “It is never easy to make decisions that impact directly on our people, but we also owe it to our customers to shape the business effectively and ensure that, when they book their holiday with us, our administrative costs are as low as possible.”
Thomas Cook said that it would begin a 90-day consultation process with its workforce.
It plans to shut 195 of its stores on the High Street – out of the 1,069 it currently has open – and cut about 16 per cent of its workforce, focusing on posts at its head offices in Preston and Peterborough and the entire closure of its Accrington office.
“It is essential that we operate with the right number of people as we move forward into the next era for our company, allowing us to meet the future needs of our customers more effectively.
“We firmly believe these proposals will mean a better – more profitable – Thomas Cook that continues to be a major employer in the UK,” Mr Fankhauser added.
Thomas Cook fell into deep water in 2011, when the unrest in North Africa and the Middle East affected its extensive operations in Tunisia and Egypt.
The group has since battled with high debt and the wider downturn in the global travel sector. It has debts of around £788m.
In May 2012, the travel group secured a £1.4bn refinancing package, giving it a further three years to pay off its debts.
The closures will add to the gloom on the high street which has already seen HMV, Jessops and Blockbuster entering administration since the turn of the year. With many areas now experiencing record numbers of vacant retail properties, even a sharp upturn in the economy is unlikely to have an immediate positive effect on the market.
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