ABSTRACT
Under the new CEO, Thomas Cook made a number of strategic decisions, such as:
• Disposing of noncore assets such as hotels and golf courses • Closing 149 retail stores, resulting in job cuts of 2,500 people • Returning six leased aircraft to the lessors • Centralizing the purchase of hotel rooms to achieve economies of scale • Removing several layers of management • Creating a new leadership team with a number of senior appointments in finance and IT, with one-
third of these new appointments being from outside the firm • Creating standardized IT systems • Giving more attention to the Web as a channel of distribution • Reducing the number of brand labels from 85 to 30 • Organizing a £1.6 billion capital restructuring to strengthen the balance sheet. This included a new
rights issue and issuing a new Euro bond of €525 million. • Initiating a program to develop high potential staff (Wembridge and Robinson, 2013)
The new CEO also established a set of financial and other targets to be achieved in 2014, and the table below shows the targets and actual results achieved in 2014 (Thomas Cook, 2014):
Table 8.1 Thomas Cook
As a result of these decisions, net debt was £336 million in 2014 down from £788 million in 2012. Profit from operations in 2014 was £323 million, compared to £156 million in 2012. Market capitalization had increased from £200 million in July 2012 when Harriet Green took over to £2,100 in September 2013.
