MyTravel shuts 110 shops as online bookings rise
MyTravel has accelerated a shop reduction programme by revealing plans to shut 110 Going Places stores this month.
The operator said the decision to bring forward its closure plan follows growing online sales which have risen from 9% of total sales in October 2004 to 16% this year.
All affected staff will be offered similar employment within the group.
The move will cost the company £14 million which will be treated as an exceptional item in next year’s account. MyTravel’s 2004/05 financial year ended on October 31.
“The decision will result in improved operating performance of approximately £10 million on an annualised basis,” a trading statement said.
The closures will leave Going Places with around 500 shops.
The update revealed trading in line with expectations with MyTravel continuing to target an operating profit in all three divisions by 2006. It warned however that progress could be affected by high fuel costs.
The operator also revealed that the repatriation of customers from hurricane-ravaged Mexico and cancelled holidays has cost £4 million.
It said “good progress” had been made in the UK during the summer driven by capacity reductions, cost cutting and product improvements.
Winter sales started slowly, the operator admitted, although business has improved in recent weeks.
Sales for package holidays are down 6% for winter and 1% for summer. Over the last four weeks, bookings for winter are down 1% but summer up 32%.
“Overall in the UK, we have achieved better prices compared with previous periods as we have improved the quality of our offer,” the statement said. “However, margins are under pressure, driven by increases in the cost of fuel.”
Meanwhile, UK tour operations and retail managing director John Bloodworth has been appointed to the board.
Report by Steve Jones
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