Thomas Cook Group’s share price fell by more than 20% this morning on the surprise news that chief executive Harriet Green was to step down after just two years in charge.
Shares slumped to 107p at one point in early morning trading, wiping more than £400 million from the company’s stock market value as the City reacted to her departure. Chief operating officer Peter Fankhauser is to take over with immediate effect.
The shares later rebounded to 112p but were still far below yesterday’s level of 139.9p and a high of 190p in March as Green’s departure was digested by investors questioning why she should quit so abruptly.
Green was seen as responsible for Cook’s financial turnaround from likely failure two years ago and was one of the few females leading a major UK public company.
Chris Beauchamp, market analyst at IG, said: “Investors will be right to ask questions over how her departure will affect the turnaround plan, so expect much of the price reaction today to be in connection to this.”
He added that the warning on more moderate growth next year “is a sign that the easy bit has been done”.
Brenda Kelly, chief market strategist at IG Markets, told the BBC: “The resignation is bound to have a negative effect.
“But there are other problems out of Thomas Cook’s control. Over the last few months the market has not looked so good – with the weaker UK currency and a struggling eurozone all having a negative effect.”
Kelly added that Green’s great achievement was to restructure the company, “realising that having so many Thomas Cook outlets around the country was based in history not reality”.
“She recognised that people were going online and looking for deals, that holiday booking tradition was different from Thomas Cook’s heyday in the 70s and 80s.
“It meant huge closures here in the UK and in Ireland, but those difficult decisions meant getting to grips with what’s happening today in the travel market.”