Thomas Cook saved… or are they?

I am thrilled to hear the news that 555 Thomas Cook shops, along with around 2,000 staff have been taken on by Hays.

Turning to the numbers, I am still somewhat puzzled by it all but hope that Irene and John Hays have seen something good in all this which led them to this purchase.

Around two years ago, Hays Travel had around 95 shops mainly in the North East. They then doubled their shops to 190 with the purchase of Bath Travel. Now they are massively increasing their shops to 745 and these are all over the UK.Last year’s accounts showed a 10 million profit on just over a billion turnover. So, to me, something doesn’t add up. That profit is really small by any stretch of the imagination on a billion turnover in any line of business. Of course, clever accounting can work wonders and I am no expert.

Nevertheless, this is a massive move for a couple who are already at retirement age.

I sincerely hope great things happen for the Hays Travel group and shall be keeping a keen eye on all they do.Now, turning to the actual travel side of it all, the new owners have said much in the press about their shops giving great service and that’s where they shine. They also say that foreign exchange and the selling of package holidays accounts for much of the Hays’ success. Still, the numbers do not add up to me.

They are going to need to do something truly amazing with their Thomas Cook purchase so does this mean that over the next two years, we will see closures of non-profitable shops?We know that TC’s collapse came as a result of many factors – lack of ability to obtain re-financing, management style, political factors affecting the purchasing of holidays and a multitude of other reasons. The fact is though, many of the factors will still be present so I am very intrigued as to how the fortunes of many re-opened TC shops, now under Hays Travel, will do any better.

Figures have not emerged as to the purchase cost of all these shops but, whatever that knock-down figure might have been, it does not get away from the fact that the re-branding of the stores, new fascias, new staff uniforms, wages etc…     will add massive extra costs.

Okay, I wish them the best of luck. I really do, but still I do not see what the Hays have.