Harvey World Travel (HWT) has gone into administration and sold almost half its branches to newly-created company Vacation World.
Staff at the group’s 57 high-street shops are being told the news this morning. The company said the termination of the group’s ABTA membership and problems with loss-making leases had left it with no option but to cut short its turnaround plan and put the company into administation.
The company admitted redundancies were now likely. Administrators hope to reveal the number of job losses later today.
The 57 travel agencies – bought from Stella Travel Services UK by Vacation Travel owner Stuart Arnott in April – went into administration on Friday (June 5).
In total 25 of the shops were sold later the same day to Vacation World, which is being run as a separate business to Vacation Travel and is being managed by consultant and former Lets Go Travel boss Simon Maunder. These branches are to be rebranded Vacation World, which plans to join Hays Travel’s Independence Group to ensure ABTA protection is provided for clients on all new bookings.
Maunder said further new staff would be recruited for Vacation World, adding : “The primary reason for going into administration was because there were a lot of rents being paid on shops which were already closed.”
The remaining 32 HWT branches – many of which are former Galaxy Travel shops – are now being operated by the administrators. Accountancy firm Tenon Recovery, appointed on Friday (June 5), is assessing the viability of these branches and is in discussion with a number of interested parties about buying some of the shops. The shops are based in East Anglia, the Midlands, and the south-west.
Tenon Recovery director Chris Ratten said: “We are looking at what to do with these shops and hope to make a decision later today.”
The shops have been ‘in limbo’ since losing their ABTA licence, although the vast majority are still trading, according to Ratten.
The level of debt left by the business is not yet known, although creditors are thought to include landlords of shops that were already closed. The deal has enabled HWT to shed the debts of loss-making leases on closed shops.
In a statement, Arnott said: “I was deeply saddened by the sudden loss of Harvey World Travel’s ABTA membership. Since acquiring the business in April, I had already improved sales, found new investors and held some positive negotiations with landlords to reduce the primary fixed overheads. ABTA’s termination of the company’s membership will result in a smaller business going forward.
“I feel particularly sorry for all those staff whose branches didn’t get a chance to restructure as a consequence of the more aggressive timetable I have now had to adopt. Had I been given the time that I needed to turn Harvey World Travel around, I could have saved more branches and jobs.”
Vacation World will now operate the following branches: Barnstaple, Braunton, South Molton, Torrington, Tiverton, Torquay, Paignton, Brixham, Dartmouth, Kingsbridge, Bodmin, Helston, Newquay, St Austell, Wadebridge, Truro Vic Sq, Ottery St Mary, Ilminster, Lyme Regis, Hanley, Cheadle, Ormskirk, Longton, Sandbach and Penkridge.