The enlarged TUI Travel group has slammed speculation that the merger of Thomson and First Choice will lead to mass closure of high-street agencies.
Thomson UK managing director Peter Rothwell said there is little overlap of the two companies’ shop networks with only 200 of its 1,100 retail outlets competing with each other in the same high street.
He dismissed assumptions the First Choice brand would be dumped with Thomson’s ‘powerbrand’ strategy being pursued.
Rothwell admitted there would be some shop closures but retaining the two brands would keep that to a minimum, with the majority of the £100 million annual savings coming from other areas of business.
“The majority of the savings will not come from closing high-street shops,” he said. “There will be some closures, but we will preserve both brands.”
First Choice chief executive Peter Long insisted both high street brands would remain: “You do not have to compartmentalise and put things in neat boxes; if the economics of having more than one shop in one town make sense then that’s what we will do.”
However, industry experts believed the enlarged TUI group could have its hand forced by European competition authorities and dump the First Choice brand.
Former MyTravel boss Steve Endacott said Brussels could make approval dependent on it getting rid of shops.
“It’s the retail estates where it holds the real power. Dual branding of retail estates never lasts long. The high street will be dominated by Thomson and Thomas Cook,” he said.
Triton director and former managing director of Lunn Poly, now Thomson, John McEwan also expected a single brand strategy to be pursued.
“When two companies join together they ultimately end up with one brand and Thomson is the strongest brand on the high street.” he said.
One senior industry analyst claimed up to half the enlarged group’s shop network could be closed over the next three years.