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Transformation plan starting to have impact, says Cook

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Transformation plan starting to have impact, says Cook

By Lee Hayhurst

Transformation plan starting to have impact, says CookThomas Cook said its business transformation plans were starting to have an impact as it announced higher margins in its first quarter to December.

The travel operator and retailer saw  revenues of £1,724 million in the three months to the end of December. And it achieved gross margin of 21.9%, up 1.3 percentage points over the comparable period last year, it said in a trading update.

The group said plans to achieve annual savings of £100 million over the next two years to 2015 were on track and a further £60 million of savings had been identifed.

Harriet Green, group chief executive, said she was particularly pleased with Cook’s UK performance.

“As we continue to strengthen Thomas Cook and determine our profitable growth strategy for the future, the power of our brand remains key to the transformation.

“We have seen stronger operating performances in our major markets – the UK, Germany and the Nordics. I am particularly pleased with the improved performance in the UK as the benefits of the turnaround plan are reflected in its operating results.

“Our business transformation is firmly on track. We have further strengthened our leadership team and the pace at which we are driving change gives me confidence that together we will achieve our near term objectives and much more.

“The business has generated higher gross margins than we did last year and this will remain an area of focus for us through the financial year.

“Our cost-out initiatives and improved cash management will be important contributing factors to the Group’s future performance and continue to receive strong focus in all parts of the business.

“Although global economic conditions and consumer confidence remain challenged, our business transformation is firmly on track.”

Cook said its Business Transformation programme was “firmly on track” to deliver on its three key elements:

• building an effective organisation: high quality executives, bringing a wealth of experience, appointed to the Thomas Cook leadership team;
• addressing costs and cash management: on track to execute announced £100m of cost reductions with a further £60m identified;
• profitable growth strategy: undertaken rigorous, and independently verified, market and customer research, to ensure strategy and future resource allocation is based on extensive and fact based information.

Cook said higher gross margins and lower overhead costs were reflected in the Group’s improved underlying operating which saw losses of £70 million compared to £93 million in 2012

It reported lower net debt of £1,559m, which had been reduced by £86m year on year and higher liquidity headroom of £290m, up £72m over the prior year due to improved cash management disciplines

In a statement it said: “Winter and Summer bookings are robust, in-line with expectations as our strategy of improved capacity management results in higher sale prices and improved margins.”

Cook also revealed the completion of the first phase of “one of the largest customer surveys undertaken in the sector” involving nearly 18,000 consumers from the UK, Sweden and Germany. The survey results have been combined with in-house data from Cook’s 23 million annual customers.

“The results, along with a profitability analysis of the industry by internal and external experts, will be used to shape our business model and future strategy, as well as accelerating our web transformation to create a web centre of excellence with channel ownership in each of our market segments,” the group said.

Thomas Cook joins Thomson in tech-driven bricks and mortar fight back

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Thomas Cook joins Thomson in tech-driven bricks and mortar fight back

Thomas Cook has become the latest bricks and mortar traditional high street travel agent promising to emulate digital giant Apple with a new concept store.
The travel giant says its new store in Leeds, that will open this month ahead of the turn of year peak booking period, with exploit the latest technology to engage with customers.

The reveal about its plans came just a month after rival Thomson spoke of its intention to open a “groundbreaking” concept store of its own within 12 months.

The “shop of the future” would seek to emulate Nike, Apple and Audi, ditching brochure racks in favour of digital screens and the latest modern point of sale technology.

Other traditional operators including Kuoni and Virgin Holidays are also brand flagship stores in high street locations, the latter having incorporated Aurasma augmented reality among other technologies in its High Street Kensington location.

Cook said research has shown that 46% of customers still seek face-to-face interaction with their travel agent but providing an omni-channel retail environment is key for the future of travel.

Retail director, Joanna Wild, said: “Our new store will be more Apple than travel and uses technology and techniques championed by iconic, high-tech brands to place our customers at the heart of the experience; allowing them to choose how they access information and dictate the level of assistance they receive from us.

“We know that shopping habits are changing, with more and more customers researching their holidays online and transactions becoming quicker, but we also know that a holiday is a massive purchase for customers who want to be inspired and enjoy that purchase process, and of course they still value that human touch and having expert advice on-hand if they need it.

“This is where our concept store will stand out and we will use it as a test bed to see what elements we might want to introduce to other stores in future.”

The 1,400sq ft concept store, in Leeds’ White Rose shopping centre, will allow customers to research and book holidays however they choose, whether searching and booking on a tablet, consulting one of 25 staff, watching a video or checking in on Facebook to qualify for a special offer.

Cook said “the holiday vibe in-store will be created with ambient music and video, while social media technologies will enable customers to share personalised, holiday-related content” and it will be the first step “in truly networking Thomas Cook travel consultants across the country”.

Recently appointed head of retail for large shops Lucy Green, who is in charge of the project, said: “The aim is to build a store that allows customers to engage and interact with us in any way they want.

“Our research found customers want options, and they felt the only option at the moment was to come in and sit with a consultant for a significant amount of time. The research focused on what they would like the store to be, and how they wanted to engage with us.”

Green, who formerly worked for The White Company, added: “Up and down the high street you can see where retailers are fighting back by investing in their bricks and mortar to create showcases for their brands.

“Ultimately it’s about future-proofing them by creating a more profitable, omni-channel retail environment but it’s also in direct response to reaction from customers who are coming back to the high street for that personal service – especially for high value or significant purchases – with John Lewis being a perfect example.”

Cook unveils new UK senior team and departure of Constanti

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Cook unveils new UK senior team and departure of Constanti

 

Thomas Cook has revealed its new UK management structure, and also confirmed that chief people officer and global head of destination management Pete Constanti will leave the business at the end of the year.

In an announcement to staff today, UK chief executive Peter Fankhauser confirmed the appointment of Uli Sperl from Thomas Cook AG as product and yield director overseeing all Cook’s UK tour operating brands and wider leisure travel products.

The appointment of an over-arching role reflects Fankhauser’s desire to move away from the previous division of tour operations into mainstream and independent businesses.

Other appointments announced today included the promotion of newly-appointed marketing director Mike Hoban to marketing, sales & e-commerce director, and the promotion of former transformation director David Taylor to chief financial officer.

Hotels4U founder Haim Perry will become hotel purchasing director, but a new position of service and quality director is yet to be filled. Joanna Wild has already been unveiled as the firm’s new retail director.

Fankhauser said: “Today marks the next step in the transformation of the UK business.  A new leadership team, focused on the UK and taking on new and enlarged roles, will unite our teams.

“Together with our colleagues, we will bring together the strengths of what was formerly our mainstream and independent businesses, working more effectively and increasing our focus on the customer.”

Cook has also confirmed that Pete Constanti will be leaving at the end of the year, just two months after he was appointed to his new role.

Constanti reported direct to group chief executive Harriet Green, and is the latest in a string of departures which include mainstream and independent chiefs Ian Ailles and Phil Aird-Mash, chief commercial officer Neil Morris, chief financial officer Michelle MacMahon and retail chief executive Simon Robinson.

A company spokesperson confirmed Constanti was leaving after 21 years with Cook, and added: “Pete’s existing team will continue to report to him until December 31. We wish him every success for the future and thank him for his commitment to Thomas Cook over the years.”