Buyer of Thomas Cook Shops Says Travel Group Can Thrive Without Airline Costs
Hays will add the outlets to its existing 190 shops to expand a business that’s more online-focused than Thomas Cook was.
(Bloomberg) -- Hays Travel Ltd., the U.K. booking agent that’s buying 555 shops from Thomas Cook Group Plc, said the stores can turn profitable without the hefty airline costs that helped bring down the 178-year-old tour operator.
Hays will add the outlets to its existing 190 shops to expand a business that’s more online-focused than Thomas Cook was, founder and Managing Director John Hays said in an interview. The travel agent will buy the leasehold on the properties together with everything inside, including customer-mailing lists.
“We don’t run an airline,” Hays said by telephone. “Ours is a much more flexible model where we concentrate a lot more on going on long-haul and scheduled airlines like British Airways and Virgin Atlantic, and then packaging that up into tailor-made holidays.”
Hays Travel, which is funding the deal from its own reserves, aims to keep all of the shops open, even where they overlap with its own outlets. That would save the jobs of 2,500 people, a quarter of whom have already been taken on, as well as creating 100 posts at its base in Sunderland, northeast England.
“If high street shops use only traditional marketing I don’t think they have a future,” MD Hays said. “Our point of differentiation is that we integrate with digital channels. Our staff will say the web is their friend, while Thomas Cook retail staff would have said the web is their enemy.”
Thomas Cook’s collapse on Sept. 23 under a mountain of debt led to 9,000 job losses in the U.K. and left 150,000 people stuck overseas, with the holiday plans of thousands more ruined. Hays struck the deal for its shops with a court-appointed official receiver and special managers from KPMG.
The company, which describes itself as Britain’s largest independent travel agent, was founded four decades ago and had sales of more than 1 billion pounds ($1.2 billion) last year, directly employing 1,900 people.
Hays said that as Thomas Cook’s largest third-party agent he met with executives from the doomed company a week before it went under and left “feeling reassured” that it would survive.
To contact the reporter on this story: Greg Ritchie in London at gritchie10@bloomberg.net
To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Christopher Jasper, John Bowker
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