E-tailers predict multiple restructure

THE big four will have to dramatically restructure the way they do business if they are to survive into the next decade, according to on-line retailers.

While the multiples will be able to make savings by closing shops, the huge costs of owning aircraft and having committed beds threatens their very existence in the long term.

This grim prediction comes as the major on-line players claim to have won the marketing battle to get consumers to book on the Internet.

“If any of the traditionals had embraced the web, marketed it and committed to it, then consumers would have happily transferred,” said Ebookers UK group managing director Peter Liney. “But the problem they have now is that we are not small any more. People’s first port of call isn’t First Choice or Lunn Poly on-line. Those companies have lost the branding game.”

Lastminute.com head of sales and marketing Andrew Windsor – formerly head of distribution at Thomas Cook – said the multiples would have to face up to the difficult ‘intellectual’ challenge of how their businesses were structured. TUI UK had made efforts to depackage with the launch of Thomsonfly.com, but only First Choice – with its move towards specialist brands – had made any real effort to restructure the way it did business.

First Choice managing director UK and Ireland Dermot Blastland said it would not reduce its number of shops, but they could become more integrated.

“More people want to go on-line but it doesn’t mean people don’t want contact,” he said.

Vertically-integrated companies had assets such as brand strength, staff in resorts and strict health and safety standards, he added.

“I think these on-line companies are just casting aspersions on the quality of our staff. They want to talk their companies up. They talk about the big companies as if they are run by dinosaurs. What are they other than a bit of technology?”