Commercial Finance Specialists

UK high street travel agent Thomas Cook has announced the closure of 200 stores, despite securing £200 million in new finance just last month. 

Creditors, which include UniCredit, Barclays, HSBC and RBS, recently agreed the commercial finance package until April 2013, despite seeing shares in the company tumble.

Thomas Cook, the world’s oldest travel agency, reported a £398 million loss for the year to the end of September. Part of its strategy to restore confidence in its finances will involve the closure of 125 more stores than had previously been stated, resulting in the loss of over 600 jobs. There was also a concession that more high street closures could follow as more business moves online.

Thomas Cook attributes the loss to factors outside of its control in popular destinations - unrest in North Africa and floods in Asia - and to charges of £573 million, which included write-downs in the value of the business.

The group has moved to reduce its debts by downscaling across its multifaceted asset base. It sold its Spanish hotel chain this week for €72 million (£60.5 million), and plans to reduce its aircraft fleet by six to 35. It will also drop hundreds of hotels from its listings. The moves are part of a corporate finance restructure through which the company aims to increase profits by £110 million.

Summer bookings are up by 8% on last year, the company notes, as it looks to retain consumer confidence in advance bookings. Consumers remain well aware that a tide of agencies, including Goldtrail, XL (the UK’s third largest at the time), and Aegean Flights, have gone bust in recent years.