Thomas Cook poised to unveil restructure plans

Thomas Cook is poised to unveil plans to restructure its UK operation as soon as new banking facilities are put in place.

The plans will involve shop closures, but at the core will be a determination to reassert Thomas Cook’s position as a retailer.

Thomas Cook UK and Ireland mainstream chief executive Ian Ailles said the company would “focus on what we are good at. The name Thomas Cook is synonymous with being a leisure retailer. We know we are a great retailer.”

The group cannot reveal details of the UK restructuring ahead of informing shareholders, but Ailles said: “I see a strong and profitable future for Thomas Cook in the UK.”

He told Travel Weekly: “There is a lot to restructure, but it is not about throwing the baby out with the bath water. It is about doing things properly.

“In the last four to five years perhaps we have become distracted, doing things that were not core to the business.”

At the heart of the plans, he said: “We are not going to be driven by volume but by profit.

“We can’t talk about it until we speak to the City, but we will be tackling a range of issues. We are already working on it.”

Thomas Cook merged its retail division with The Co-operative Travel and Midlands Co-operative in October, creating a chain of more than 1,200 shops. Media reports have suggested the company could now close 200 outlets in the UK.

Ailles said: “It’s normal for high street retailers to move or shut shops every year. We are pragmatic about it. Some shops will come up for a break in the lease and that will create a decision point.

“We are looking at it and we’ll take a decision. Two hundred is not the number in my head, but it might be a number we reach over a couple of years. We will talk about shop plans in the announcement to the City.”

There are no further plans to cut the Thomas Cook Airlines fleet, he said, following the announcement in September of a reduction from 41 to 35 aircraft in the UK.

Ailles said: “We already announced we are letting six aircraft go and we are consulting with the airline team and the unions about that.”

Thomas Cook is reported to be locked in talks with its banks amid growing hopes that a rescue refinancing package could be confirmed as early as today.

Banks are expected to call for an acceleration of a £200 million asset disposal and a widening of its scope to raise more funds and make the group less unwieldy.

Analysts said they expected the banks to extract a high price for throwing Cook another lifeline, both in the cost of the debt and the conditions attached, The Times reports this morning.

Shares in Europe’s second largest travel group, which fell 75% on Tuesday, jumped by 5¼p to 16¼p yesterday on hopes of a deal.

The company was forced to delay publication of its final results, scheduled for yesterday, pending talks with its banks. Cook said it was negotiating for an extra £100 million borrowing facility and extra headroom on its covenants.

Sky News has claimed the decision to delay its results came after a failed attempt to agree a £400 million share rights issue at the weekend.

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