Thomas Cook to close 200 stores

Thomas CookThomas Cook has said it will close 200 stores over the next two years as it battles to turn around its ailing UK business.

It had already said it expects to close about 75 sites following its merger with the Co-op's UK high street travel business, which left it with more than 1,300 travel shops, but has now said a further 125 will be shut.
The group also revealed it had slumped to a £398 million pre-tax loss in the year to September 30, compared with a £42 million profit in the previous year, after it was hit by poor trading in the UK and the Arab Spring put tourists off travelling to Tunisia and Egypt.

It also wrote down the value of its UK and Canadian businesses.

Staff in 115 of the stores are now expected to be informed that their branch is due to close, leading to the loss of 661 jobs. The rest of the store closures will be announced over the next two years.

The group, which sells more than 22 million holidays a year in the UK, delayed its results last month as it revealed it had gone back to its lenders to ask for an additional £100 million lifeline.

Its shares slumped 75% in one day amid fears for its survival but the 170-year-old company claims it is now on a sound financial footing.

The group said the first quarter of its new financial year had got off to a slow start.

While there had initially been an "adverse impact" on bookings in the UK following its announcement, it said it was encouraged by customers' response to its recent summer promotion.

Bookings from UK customers for next summer were 8% ahead of last year although it has also cut capacity by 8%. But UK bookings for the current winter season are down 11%.

© 2011 Press Association
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