Almost a tenth of the Thomas Cook stores snapped up by Hays Travel this week are within 100 metres of the independent travel agent’s existing shops, raising the prospect of mass closures.
Hays Travel, which already had 190 outlets, purchased Thomas Cook’s 555 UK stores from liquidators in an ambitous deal which stunned the City. It has pledged to reopen all of them under the Hays brand.
But as many as 49 of the 555 former Thomas Cook stores are within 100 metres of existing Hays Travel sites, analysis by the Local Data Company shows. Of these, 33 are within 50 metres.
And a total of 76 the acquired stores are within a kilometre of a Hays store – suggesting major overlaps between the pair’s businesses…
We would indeed expect a number of them to close. The deal guarantees rents ’till the end of November. After that renegotiations with landlords. And all T Cook redundancy payments are the problem of the administrator, not Hays.
The deal, signed late on Tuesday night, was funded without debt and was for less than £50m, according to one person close to the negotiation.
Not that anyone would actually do this, heaven forfend. But take over the entire estate, at pretty much zero cost (£100k max per site is that) then sort through it at leisure. And, of course, entirely kill off the idea of anyone else taking over the competing network of travel agents shops. Those you don’t want can be sat upon for a few months just to kill off any idea of that competing offer too.
Nice move. The major competition has gone, for a pittance you’ve ensured the non-appearance of a new rival and also expanded the estate of your now much closer to major player with market power.
Who will really lose from this? Well, obviously, too soon to tell but I’d not want to be a small scale packager of holidays selling into the UK retail network now. There’s going to be substantial pressure on margins from that dominant retailer……..