Thomas Cook plans to close fewer than one in 15 shops in the merged retail group with The Co-operative Travel and Midlands Co-operative, and few are likely to shut before next year.
The number will be smaller than if the merger – now approved by the Competition Commission – had been prevented from going ahead, Thomas Cook chief executive Manny Fontenla-Novoa said today.
Fontenla-Novoa told Travel Weekly: “The two companies merged will be much stronger than on their own. The number of shops we keep open will be much higher, and more shops on the high street is good news for consumers.”
The Thomas Cook boss insisted job losses would be kept to a minimum, although redundancies are inevitable among staff at the companies’ merged head offices. Thomas Cook’s Peterborough headquarters will run the merged retail group.
Fontenla-Novoa said: “We never hid the fact there would be some closures where there is duplication. We believe 75 or so stores will close, but I can’t tell 100% because we can’t share commercially sensitive information in advance of the final clearance.
“A lot of factors come into play. Where shops close may not be obvious. It is not just about overlap. We have a lot of places now where there is a Going Places store next to a Thomas Cook.”
Fontenla-Novoa said: “We will work hard to offer alternative jobs in the high street and opportunities to move within an area. We’re confident we will not have a great deal of redundancies. Any high-street retailer will tell you they have a high turnover of staff. Our turnover is relatively low, but I believe we can accommodate most staff.”
Closures unlikely before 2012
Shops are unlikely to be identified for closure before next year, meaning retail staff can relax about the immediate outlook. The merger should formally be completed by October, following today’s provisional clearance by the Competition Commission, and management will begin to examine shop leases and so on from December.
Fontenla-Novoa said: “We get final clearance in mid-August. Then we have to complete – that could take six weeks. It will probably take a couple of months after that to take a view. Then we will look at the leases and a lot of other things. In terms of closures, it is unlikely to be before the new year.”
He added: “Our staff mean a lot to us. We hope to minimise the impact on the high street.”
However, Fontenla-Novoa said merger of the two head offices would be harder to handle.
“There is overlap. Clearly there will be some job losses,” he said. Some Co-op staff will transfer to Peterborough, he confirmed, adding: “My understanding is there are a lot of other Co-op group functions based at the Co-op head office.”
The Thomas Cook chief executive could give no idea of the numbers likely to be made redundant, but confirmed the merged group’s homeworker and franchise divisions would remain in place.
“The homeworker division will remain as it is. We want to invest in that area. The Co-op does it so much better than us,” he said.
Fontenla-Novoa spoke to Travel Weekly after addressing Thomas Cook staff this morning.
The merger will combine Thomas Cook’s 780 shops with the 380 in The Co-operative Travel group and 100 at Midlands Co-operative.
Thomas Cook’s Going Places brand will disappear, with shops rebranded as The Co-operative Travel.