Thomas Cook to focus on city breaks


Thomas Cook promised to become more "high-tech and high-touch" as it rolled out its turnaround strategy with a bigger focus on city breaks.

The UK's second largest holiday operator, which staved off collapse a year ago following a rescue deal with lenders, said its plans centred on providing customers with "trusted and personal" holiday experiences.%VIRTUAL-SkimlinksPromo%
It hopes to achieve the strategy while cutting another £50 million of costs on top of the £350 million already identified. Last week, it announced it will axe 2,500 jobs or 16% of its 15,500-strong UK workforce and close 195 high street travel agencies, reducing the estate to 874 shops.

Unveiling its strategy to investors, Thomas Cook said the outlook for the current year was encouraging, with bookings for summer holidays going well.

Chief executive Harriet Green, who joined the company last year, said: "We will expand our already successful hotel concepts and build a new portfolio of flexible, trusted products and services."

The review, based on a survey of more than 18,000 people, identified that some holiday types such as city breaks were only a small part of the Thomas Cook portfolio, a shortfall it has vowed to address.

Ms Green added: "The customer survey has led us to conclude that trust, personalisation, high-tech and high-touch are the success factors in travel and consistency and strong brand are the drivers of consumer choice."

The company will also look to reduce its online brands and websites to just three customer-facing sites in the UK and one in Germany.

The review, which triggered a 14% rise in its share price, comes amid speculation that Thomas Cook will look to tap shareholders for £400 million in a bid to bolster its finances. It said it was still considering what action to take.

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Thomas Cook to focus on city breaks

Administrators sounded the death knell for Woolworths in December 2008, leading to store closures that left 27,000 people out of work. Since its collapse former Woolworths stores have become a blight in many town centres and more than 100 of the large stores still lay vacant in January 2012.

Loyal customers didn't have go without the family favourite store for long however as it reappeared online as Woolworths.co.uk in 2009, after Shop Direct Home Shopping bought out the Woolworths name.

The greetings cards specialist became the latest highstreet casualty in May with 8,000 jobs on the line when it was forced it into administration. Its biggest supplier, American Greetings, then bought Clintons out of administration and put the retailer through a rebrand including a new logo and complete in-store revamps.

Its contemporary format includes new fixtures and fittings and easier to navigate stores, and will be rolled out to all 400 UK stores at the cost of £16million. Bosses aim to bring the brand back to profit within two years.

Poor sales in the run up to Christmas was the final nail in the coffin for several struggling chains, including lingerie retailer La Senza, which went bust in January 2012 with 146 shops and 2,600 staff. Kuwaiti retailer Alshaya bought part of the business, which saved 60 shops and 1,000 staff.

La Senza has been struggling in a similar way to other specialist shops such as Game and Mothercare, which have been hit by cut-price competition at supermarkets and have no alternative products to help shoulder losses.

Stricken retailer Blacks Leisure, which employed 3,600 staff across 98 Blacks stores and 208 Millets stores, went into administration in Janurary 2012 after failing to find an outright buyer.

Soon after its stores were bought by sportswear firm JD Sports in pre-pack deal - an insolvency procedure which sees a company being sold immediately after it has entered administration – which saw most of Blacks' £36 million of debt wiped out.

Fashion chain Bonmarche, which was part of the Peacock Group, was sold in January when the group collapsed due to unsustainable debts, resulting in 1,400 job losses and 160 store closures. Private equity firm Sun European Partners bought 230 stores, which continue to trade with 2,400 staff.

Peacocks collapsed under a £740 million net debt mountain in January 2012 in the biggest retail failure since Woolworths. Despite being sold out of administration to Edinburgh Woollen Mill in a deal that saved 380 stores and 6,000 jobs, administrators from KPMG were forced to close 224 stores with immediate effect. This lead to 3,350 redundancies from stores and Peacocks head office in Cardiff.

The high street name continues trading as bosses work to stabilise the situation, yet a further blow was dealt this month with news that the firm's pension fund is in £15.8 million shortfall as a result of the collapse.

Game buckled under its £85m debt pile in March 2012 and was placed into administration after being unable to pay a £21m rent bill. Administrator PwC immediately closed 277 shops, with the loss of 2,000 jobs. Soon after, investment firm, OpCapita bought 333 Game stores, saving more than 3,000 jobs.

Game's demise followed a string of profit warnings and the failure of nervous suppliers, including leading names Electronic Arts and Nintendo, to go on providing the latest games, further damaging poor sales.

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