Holiday firm loss adds to High Street woes
Around 600 of Thomas Cook’s stores were shut down after the travel company collapsed following an unsuccessful rescue bid in the early hours of September 22.
The closures also came in a week that released damning new research that claimed 55 football pitches of retail space has been lost in the last 12 months.
The new research has found that 4.2 million sq. ft. of retail space was lost in England and Wales in the past year as shoppers flocked to online sales.
The 55 football pitches worth of retail space has been converted for other uses, according to law firm Boodle Hatfield, which said the most space had been lost in out-of-town destinations such as retail parks.
The trend was crystallised this summer by the purchase of Karen Millen’s business by online fashion giant Boohoo, which was not interested in the brands’ physical estate across the UK, which all shut.
Retailers are continuing to cut unprofitable space and dedicate more effort to their online sales,” Boodle Hatfield partner Simon Williams said.
Reading was the worst-hit area, losing more than 215,000sq ft of retail space, according to the research.
This was followed by Nuneaton and Bedworth, which lost 183,000sq ft, and Kensington and Chelsea, which lost 151,000sq ft.
Other locations in the top 10 were Sutton, Southampton, Cambridge, Manchester, Newport, York and Bradford.
Thomas Cook, the world’s oldest tour operator, ceased trading with immediate effect on 23 September after failing in a final bid to secure a rescue package from creditors.
Alongside its raft of high street stores, the company’s four airlines have been grounded and its 21,000 employees in 16 countries, including 9000 in the UK, are now unemployed.
Thomas Cook’s chief executive Peter Fankhauser said: “Following a decision by the board late last night, the UK Government’s official receiver was appointed in the early hours of this morning, the 23rd of September, to take control of Thomas Cook.
“Despite huge efforts over a number of months and further intense negotiations in recent days, we have not been able to secure a deal to save our business.
“I know that this outcome will be devastating to many people and will cause a lot of anxiety, stress and disruption.”
In a statement, the syndicate of Thomas Cook’s lenders said: “Unfortunately, and notwithstanding the efforts of all stakeholders, the £1.1 billion funding requirement to adequately recapitalise Thomas Cook has ultimately proved too significant.
“The lenders providing finance facilities to the group have been extremely supportive stakeholders, including through two periods of financial distress and have stood behind Thomas Cook over the past twelve months, a period where the group saw cash outflows of about £1 billion, maintaining that position over the crucial and busy summer holiday period.
“Obviously, the lenders are deeply disappointed that it has not proved possible to rescue Thomas Cook.
“In partnership with other stakeholders, the lenders worked tirelessly to examine all options within the time frame required.”
Business Secretary Andrea Leadsom said she would write to the Insolvency Service to ask them to “fast-track” their investigation into the circumstances surrounding Thomas Cook going into liquidation.
The investigation will also consider the conduct of the directors, the Department for Transport said.
Leadsom said: “This will be a hugely worrying time for employees of Thomas Cook, as well as their customers. Government will do all it can to support them.