Adopting an omnichannel strategy is critical, says Cook's Green

By Travolution

Implementing an omnichannel strategy is critical for success in today's market, according to Thomas Cook chief executive Harriet Green.

Speaking at a Travel Weekly Business Breakfast, Green said one of her first priorities when she started at the business in July last year was to integrate the websites with the rest of the business.

She said: "For reasons best known to this environment the web part of Thomas Cook and other major tour operators was completely separate.

"It had separate targets and none of the rest of the organisation worked with them - why would they, they had absolutely conflicting interests.

"The only time Thomas Cook sold anything effectively on the web was when no-one else wanted to. It was the most dysfunctional thing.

"On week 14 we said we’re going to emancipate all of you guys from the OTA and we’re going to develop the web channels in region then have this centre of excellence."

Green said the high street was still important, despite the company's plans to close 195 shops, but had to be used effectively with other channels.

She told delegates: "There has to be change and agility within an omnichannel environment. The web is important, but an omnichannel environment is critical.

"Retail as it was isn’t going to be with us any longer. In the UK the high street has a very important role, perhaps not to the level that Thomas Cook had penetration but on that we’ve made our plans very clear.

"It is staggering to me that Thomas Cook was the first company in the UK travel environment to put all products through all channels at the same price on the web last November. Other industries did that ten years ago."

Greenacre voices concern for future of Co-operative Travel

By Ian Taylor


Former Co-operative Travel head Mike Greenacre has questioned Thomas Cook’s plans to close shops and appoint ‘cluster managers’.


Writing for this Business:am, Greenacre, architect of the joint venture with Thomas Cook, asks Cook to consider whether the plan “will deliver”.


He also queries the future for The Co‑operative Travel name, arguing: “There appears little attempt to continue differentiation between brands.”


Greenacre ran The Co-operative Travel for three decades, retiring at the end of 2011 after completing the joint venture.


He says the deal to combine the retail businesses “aimed to ensure The Co-operative Travel would continue to flourish while as many jobs as possible were protected”.


Greenacre argues the company was “still profitable” at the time, although its profitability was declining. “We knew not all jobs would be protected [and] unprofitable shops and businesses would close”, he says. But he said only about 15 shops “were losing significant money”.


Thomas Cook this month announced the closure of 195 shops – 103 of them Co-operative Travel branches – and is in consultation over the loss of 2,500 jobs.


Greenacre acknowledges the seriousness of Cook’s financial situation, but pleads: “Make certain the branches on the closure list really have no future.”


He says in his experience “less business transfers [to other branches] when a shop closes than you think”.


He also advises Cook to rethink the policy on cluster managers, saying: “This has been tried many times and never delivered.” Cook plans for assistant managers to run shops day to day, with ‘cluster managers’ having overall responsibility for two to five shops.


Greenacre’s biggest concern is the future of The Co-operative Travel brand.


“There has been little commentary about the part The Co-operative Travel will play in the long term,” he says.


A Thomas Cook spokesman said: 
“We are absolutely committed to The Co-operative Travel.”

Thomas Cook reviews future of its airline

Thomas Cook reviews future of its airline

By Phil Davies

The future of Thomas Cook’s airline business is under review as part of chef executive Harriet Green’s turnaround plans for the loss-making group.

The disclosure came in the wake of moves to dispose of unspecified non-core assets to bring in as much as £150 million.

Green yesterday announced an additional £50 million of cost savings, taking the total to £350 million by 2015. This helped lift Cook shares almost 16% to 100.75p.

Part of those savings include £65 million from bringing its four airlines, which have 86 aircraft and employ 6,500 people, into one group.

Green would not rule out the disposal of all or part of the airline business.

“Does Thomas Cook need to have an airline in the future?” she told the Financial Times. “We have options. We are reviewing whether we should continue with the airlines that we have.”

The group had “over-complicated the business” through a series of acquisitions, including airlines, said Green.

“In essence, it is not a complex business that shouldn’t demand huge amounts of debt,” she said.

Green believed the group had become weak in its city break and winter sun offers, and would start to offer new products pitched at women and children.

The restructuring includes the closure of 195 high street agencies, contributing to the loss of 2,500 jobs.

New targets include 50% online sales and an earnings before interest and tax margin of 5%, both by 2015.

Cook earns about one-third of its revenues from online sales and the remainder from its outlets, according to the FT.

The group confirmed that a review of its capital structure could result in a future share placing.

“When that review is complete we will decide on what action we should take, if any, including whether to raise new debt and/or equity capital and the amount and structure of any such capital raising,” the company said.

Wyn Ellis, analyst with Numis, told the newspaper: “We wait to see how it progresses: a lot of hard work needs to be done if it is to succeed with its ‘high-tech, high-touch’ approach.”

James Hollins, analyst at Investec, said: “There is no update on a potential equity issue or refinancing...Current trading is stated to be ‘progressing well’ for the key summer period and the full-year 2013 outlook is ‘encouraging’.”

Harriet Green insists 'Cook is not in decline'

Thomas Cook chief executive Harriet Green today hit out at any suggestion the group is in decline.

Green said: "Cook is a super brand in a growth industry."

Having outlined the new strategy for the group yesterday, Green insisted the company would retain a presence on the high street.

"Retail is a very important part of Thomas Cook's future," she said.

"We do not want to be an online travel agent with every piece of product out there and with no assurance.

"Everything on our website will be fully quality assured and checked by Thomas Cook."

Green said: "We have made extraordinary progress in 32 weeks. This company was not very well when I joined. Now we are into transformation. We have a credible, profitable, growth story. The company has to prove it can execute it."

She insisted: "Thomas Cook will grow and grow profitably. We have no intention of shrinking to greatness but it's about being simpler and clearer."

Cook boss Green reveals strategy for the future

By Phil Davies

Thomas Cook today unveiled long-awaited plans for a turn-around in the business involving the sale of non-core assets to raise up to £150 million.

No businesses were identified but ski arm Neilson and Preston-based luxury operator Gold Medal are thought to be among the divisions considered for disposal.

The group said the non-core disposal programme is underway with the opportunity to realise gross proceeds of £100 million to £150 million.

In a brief trading update ahead of half year results being published in May, the group described the UK turnaround as being on track.

Cook said its new profitable growth strategy was focused on “simplification, web innovation, flexible new products and services, enabled by rigorous execution and an integrated IT platform”.

Group chief executive Harriet Green said: "Our business transformation plans are ahead of schedule and already delivering substantially improved performance, which resulted in our recent return to the FTSE 250.

"We have exceeded our initial commitments and today announced a further £50 million of cost out actions, bringing the total profit improvement actions identified already to £350 million, £290 million of which is still to come.

"Stabilising the business has been our priority through addressing our cost and cash challenges, and strengthening the leadership team to create a more effective, aligned organisation focused on rigorous execution."

She added: "We are excited to now reveal our new strategy based on four cornerstone principles; delighting customers with trusted, personalised holiday experiences through a high-tech, high-touch approach.

"Based on comprehensive consumer research we aspire to occupy a unique position in the market through our new strategy, deliver industry leading margins and customer loyalty, whilst maintaining consistent quality that can be trusted.

"We will expand our already successful hotel concepts; and build a new portfolio of flexible, trusted products and services; creating a single gateway for customers to access personalised recommendations, specifically tailored to meet their needs.

"The operational credibility of this strategy rests on the success of our self-help measures to date, our trusted brand and the clear targets and KPI's against which we are ready to be judged.

"We have real options now, with the prospect of delivering improved revenues, strengthened gross margin, better cash flow and disposal opportunities, to build a strong and exciting future for the Thomas Cook Group, worthy of our customers and our heritage."

Cook said the new strategy, which includes raising web penetration to half of all sales, has been based upon extensive research and analysis including a comprehensive, in-depth survey measuring the attitudes and changing needs of almost 18,000 travellers, validated against the experiences of many of its own customers.

The group added: “Building on its trusted brand and 171 year heritage Thomas Cook will deliver personalised holiday experiences through a high-tech, high-touch approach.”

This comes a week after the company under UK boss Peter Fankhauser announced 2,500 job losses and the closure of 195 travel agency branches.

Today the group said the “thorough” UK restructuring was underway to re-shape the organisation to meet customer needs with a target to deliver UK EBIT margin in excess of 5% by 2015.

A transformed approach to hotel purchasing to utilise group scale is already delivering “tangible benefits”.

Cook described its business transformation as gaining momentum with a further £50 million of “cost-out actions” identified bringing the total profit improvement actions so far to £350 million with more to come.

The Northern and Central Europe divisions continue to build on their industry leading positions while Cook is creating a group-wide airline business to improve costs, quality, reliability and customer experience to build a stronger business.