TTG Digital looks back on a year of restructuring
It is a year since Thomas Cook delayed its full-year financial results in order to seek emergency funding from its banks. In an analytical feature, TTG Digital looks at the changes the company has been through since then and what lies ahead.
Among the many measures the operator has taken to cut costs and return to profit, Cook is in the process of closing more than 120 shops and may close another 72, with more than 1,000 so far losing their jobs as a result. It is leasing back aircraft and selling off property assets. While some investment analysts think the brand has managed to weather the storm and is on track for an eventual recovery, others say it still has a long way to go. More asset sales may yet be announced.
“Cook has succeeded in stabilising the debt, that’s really all,” says Douglas McNeill, from Charles Stanley Securities. “Debt at the year-end just gone will have been pretty similar to what it was a year ago. I think there will be plenty more restructuring to come. I would not be at all surprised to see further closures of retail and back office premises.”
As reported, a series of high-level departures has hit Thomas Cook since the arrival of new CEO Harriet Green in July. “The clear-out of management has been quite dramatic,” another expert comments. But the biggest challenges may lie ahead as the company struggles to raise the profile of presence on the internet.
“The biggest challenge is the nature of its distribution, as people move online,” says Christopher Jones, director of Livingstone Partners.