Comment: Early checkout at Thomas Cook

Martin Flanagan
Martin Flanagan
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IT IS a shock to see that the boss who has given the resuscitated Thomas Cook holiday giant a chance of survival is checking out just two years into her tenure.

All the more so in that Harriet Green only said a few days ago at a public conference that a true transformation of the business, which was flailing badly in 2012, would take about six years.

Assuming Green has not had a memory lapse on realistic timings, one can only think the outgoing chief executive means that her groundwork, laying out the path to recovery for Thomas Cook, could be done in two years, but that achieving a full turnaround needs to be done over the medium term … and she is not hanging around to do it.

Thomas Cook’s stock market value has soared from £148 million when Green came on board to £2.7 billion earlier this year, but the near-18 per cent hit the shares took yesterday shows institutional investors did not buy into her apparent rationale. They are likely to feel justifiably short­changed, if not downright sceptical.

To say her own work is done but the turnaround is far from secured will be seen as arid semantics by disgruntled shareholders. You could also argue that Green’s undoubtedly successful initial restructuring moves have been largely an exercise in retrenchment in reward for big bucks.

It has been a massive cost-cutting exercise, involving slashing jobs, disposing of businesses and quitting low-margin operations in order to right the listing Thomas Cook cruise liner.

But any chief executive worth their salt will tell you that slashing and burning the cost base is the easy part. Growing the business is the hard bit.

The timing is also unfortunate as the holiday sector environment is also deteriorating, nowhere more than in economically battered France, a prime region for Thomas Cook. The macro­economic environment is turning challenging again, never good for the leisure or business sectors.

That suggests Green’s successor, Peter Fankhauser, who has been chief operating officer at the group for 13 years, is likely to preside over stability rather than notable advance for at least a couple of years or so.

Green’s exit timing, therefore, again looks good. She joined Thomas Cook from British technology distributor Premier Farnell for a pay and bonuses package worth £2.8m in 2012-13.

Many will jump to the conclusion the departing boss may be seeking another challenging corporate berth, and it will be interesting to see where she emerges on the business scene.

US copycats just out to make a killing

YOU’VE got to laugh at the chutzpah of the retail industry. Black Friday… yeah, so depressing we try to make an absolute bomb out of people shopping early for Christmas. It doesn’t get much blacker for the high street than that. I also don’t associate the UK with celebrating Thanksgiving Day itself – the day before the money-spinning said Black Friday. We Brits also don’t go overboard on celebrating the Fourth of July either, actually.

No matter, where Amazon and Wal-Mart (which owns Asda over here) boldly go in search of big bucks from bargain-hungry Americans, the UK high street slavishly follows.

It gets more ridiculous. Amazon actually started its “run-up” promotions to Black Friday last Monday.

What’s the betting some retail tech giant will set the pace for flogging festive television sets at knockdown prices next year on Halloween, and bill it Retail Fright Night?


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