In a move that could save up to 2,500 jobs, Hays Travel announced on Wednesday that it is to acquire 555 Thomas Cook stores from the Official Receiver. The acquisition, for an undisclosed sum, is a significant step for Hays, which has 190 shops, 1,900 staff, and last year had sales of £379m, reporting profits of £10m.
Mr. Hays, who owns the business with wife Irene, said: “It is a game-changer for us, almost trebling the number of shops we have and doubling our workforce – and for the industry, which will get to keep some of its most talented people.”
Following the news, travel industry’s data and analytics experts offer their view on the deal. Not many in the industry saw this deal coming but it is welcomed news for the high street. It is a bold move on Hays’ part, but Thomas Cook is a cherished brand with an established customer base and if Hays has negotiated well, the move may just pay off.
Much will depend on the terms of the deal. As this is breaking news, the industry does not yet know the cost of the deal, what terms can be agreed with landlords for example, but this was most certainly a buyer’s market situation so Hays should have been able to negotiate favorable terms.
Thomas Cook’s demise was the result of a multitude of factors, but at the core was a mountain of debt that was just too costly to service. Group revenue was £9.6 billion for FY2018, so there is still demand for some of the company’s services.
Hays should be able to operate without the millstone of debt round its neck and the publicity around the Thomas Cook collapse may even spur people to seek out Atol protected package holidays for peace of mind, which will play into Hays’ hands.
The deal is not however, without peril. It will have to conduct a review of store locations and operations and there may be a need for a rationalization at some point, particularly in areas in which Hays already has a strong presence. Hays will also need to make sure it invests in digital trends as competitive online threats to a large store network are legion.