Thomas Cook board must share large part of blame, says The Co-operative Travel’s former managing director Mike Greenacre
It’s easy to blame Thomas Cook managers for what has emerged over the past few years. And yes, some key strategic decisions were wrong. But the Thomas Cook board must share a large part of the blame for its failure to provide effective governance and its fast-growing debt. There is also the fact that the pace of change in the industry did not help Cook’s position because of how it responded to those challenges.
When the Co-op Group was considering whether to sell or change the footprint of the business, along came Thomas Cook to discuss ‘merging’.
I sat down with my good friend Ian Derbyshire, who is sadly no longer with us, to explore what might be possible. Our own Co-operative mergers, concluded in 2007, had made good progress yet still had some way to go to drive all the benefits.
We were, of course, aware of the ever-growing negative impact of online business on our retail shops and, to a lesser extent, call centres.
With Cook’s approach, we gave serious thought to the fact we would have to close more branches to remain profitable, expand our online offering and continue to grow Future and Freedom Travel.
Cook recognised the Co-op Travel brand was not unique, but was a national business with a national brand built around providing exceptional service to local communities. Whether you believe me or not, the proposed deal presented me with a real personal dilemma: I really loved our business but was unsure what the future might hold for it.
There was a clear message: Cook would retain the Co-op brand, which it recognised offered a different proposition to Cook by specialising in local, personal service. That became the main driver of our decision to sell. Even now, unless travel agencies create a point of difference, it will continue to get harder to remain profitable. This is true not just for the travel sector.
Cook never understood Co-op
Agreement was reached and the merger got the nod. The rest is history. As Manny [Fontenla-Novoa, former Cook chief executive] departed with many of his team, the new regime showed little interest in developing the Co-op Travel brand.
In December 2016, they decided to drop it, and it began to disappear from the high street. I don’t think they ever understood what our brand stood for. And I will never understand why you would pay more than £80 million for a business to close it down.
Despite the real emotional challenges, it remains clear the merger was the right decision for Co-op. And while I felt the brand, and many jobs, would be retained, the cessation of the brand, as well as the demise of Thomas Cook, is tragic – most notably for the thousands of colleagues who lost their jobs.
For the experienced consultants who have specialisms, I would implore you to look at homeworking. You effectively run your own business and I’m sure many of the ex-Co-op staff who made that leap have no regrets.
I don’t think there would be much I would have changed with hindsight. Financially, it was a good deal for the Co-op Group. It’s all very sad and you can’t but wonder still if we will ever see Thomas Cook as a brand back in the travel sector again.
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