Thomas Cook Group announces that it will take full control of its UK retail store network, following notification by The Co-operative Group of the decision to exercise its option over its stake in their Joint Venture (the “JV”).
Under the terms of the JV agreement, Thomas Cook will purchase The Co-operative Group’s 30 per cent stake and Central England Co-operative’s 3.5 per cent stake for £50.0 million and £5.8 million, respectively, in cash. Following completion, which is expected in November 2017, Thomas Cook will own 100 per cent of the UK retail stores business.
The JV was formed in October 2011 through the merger of the travel retail businesses of Thomas Cook, The Co-operative Group and Midlands Co-operative (now Central England Co-operative). The JV currently has 764 stores in the UK across two brands: Thomas Cook and The Co-operative Travel. Thomas Cook retains the right to use the Co-operative Travel brand until November 2018.
The financial results of the JV are already fully consolidated in Thomas Cook Group’s consolidated financial statements and, as a result, the transaction is not expected to have a material impact on the Group’s profit and loss account.
Thomas Cook Group Chief Executive Peter Fankhauser said: “Our relationship with the Co-op has given us a strong presence on the high street and fantastic colleagues across the UK, both of which are so important in attracting and inspiring our customers. This purchase gives us full control over our retail store network, enabling us to better integrate our stores with our online offering, while also helping us to focus on growing sales of added extras such as holiday-related financial services.
“Over the next two years, we will bring all of our UK stores under the Thomas Cook banner so we can make full use of the best brand in travel.”
Rod Bulmer, Chief Executive, Consumer Services at the Co-op said: “We have enjoyed a successful partnership with Thomas Cook through the joint venture. Going forward, having a minority stake in a travel business does not fit with the strategy of the Co-op. The financial arrangements for exit that were put in place as part of the original JV agreement represent the best value for our members. The payments we receive from the exit will be used to invest in our core business areas.”