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Published on Tuesday, November 5, 2019

93 Thomas Cook stores were making significant losses







Hays Travel has revealed that 93 former Thomas Cook stores had been making significant losses.

It disclosed the figure as it was forced to justify the price it paid for the licences for Thomas Cook's 555 shops following Cook's collapse.

In a letter, published this week, Hays was responding to a series of questions from MPs as part of an inquiry into Thomas Cook's failure by the Business, Energy and Industrial Strategy Committee.

Hays paid £6.1 million for the shop licences, which was widely regarded to be a low price, but told MPs this reflected the loss-making stores and also reflected the potential liability for the condition of some of the properties.

Hays said that according to the liquidator, 93 shops were generating total losses of £5 million pre-failure.

But it said the other shops were contributing a £28.8 million profit, so the starting net position was a £23.8 million profit.


Hays has now re-opened over 400 of the stores and has taken on more than 2,000  former Thomas Cook staff.

Hays said it was confident it could help turn the loss-making shops around, thanks to its significantly lower overheads, lack of debt, and because of its different business model.

"Hays Travel agencies are totally independent," it told MPs.

"Staff match the best value holiday based on the customer specification irrespective of supplier. Thomas Cook had a tour operation as well as travel agencies. Their staff were trained to directionally sell Thomas Cook holidays to their customers. In some instances Thomas Cook would not sell the products of their competitors such as Jet2 Holidays."

It said Hays Travel's high street shops are heavily integrated with the company's digital, with each branch having its own Facebook account.

"Crucially there is no price differential between the cost of holidays on the Hays Travel website and those sold through the retail stores. In Thomas Cook their own holidays were cheaper on their website than in their shops. Customers were aware of this and therefore booked online to save money," it said.

Hays said it also had a different approach to its staff, pointing to a 'high degree of trust across the business' with staff 'free to bring their personality and character to their roles'.

"There are no pre-prepared selling scripts. Personalisation and treating each customer as an individual is a key part of the training. Hays Travel staff are given discretion to match the cost of a holiday against any reasonable quotation if they are able to do so. Thomas Cook staff were trained to use a single scripted sales technique and had no discretion with regard to pricing."

When asked about locations with multiple stores, how many shops it would have to close, and potential job losses, Hays said there are 49 shops in towns and cities where Hays Travel currently operates, less than 10% of the total estate 555.

"It is the intention to trade in all the shops, where we are able, during the licence period. This will give the company the opportunity to look at how each shop is performing and whether there will be a need for a closure," it told MPs.

"In some places Hays Travel already operates successfully with two or more shops. This is dependent on the proximity.

"In relation to job losses Hays Travel is constantly recruiting and always needs a pool of staff to cover holidays, sickness absence and maternity leave. There is no intention to make staff redundant should a decision be taken to close a shop after the licence period has elapsed."

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