All Thomas Cook stores in the UK will be acquired by a rival travel firm.
The 555 high street stores have been bought by Hays Travel, Britain’s largest independent travel agent, which will also safeguard a “significant number” of jobs for former employees. Hays has already recruited 421 former Thomas Cook staff.
It is believed up to 2,000 additional staff may return to their former stores.
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“Former employees re-employed by Hays Travel will not have their eligibility for redundancy payments affected,” the Insolvency Service said.
Thomas Cook collapsed on 23 September when a financial rescue plan fell through. The firm was heavily indebted.
John and Irene Hays, respectively managing director and group chair of Hays Travel Ltd, said: “Thomas Cook was a much-loved brand employing talented people. We look forward to working with many of them.”
Other travel firms, notably Travel Counsellors, have been actively recruiting former Thomas Cook staff.
The Thomas Cook retail estate had been downsized in the past few years to around half of its maximum size.
Several buyers were interested in a “land grab” of travel agencies after the collapse of Thomas Cook – an opportunity to increase their footprint and market share relatively quickly.
Besides Hays, it is believed the giant rival Tui was interested in picking up some premises – but did not want to duplicate in towns and cities where it already had a strong presence.
Miles Morgan Travel and Mid-Counties Cooperative also put in bids.
The Scottish chain, Barrhead Travel, was also interested in expanding southwards.
But the Official Receiver clearly felt that a single buyer and a swift transaction was the best way to proceed. It mirrors the sale of precious slots at Gatwick airport when Monarch collapsed two years ago; rather than selling them off piecemeal, the liquidators opted to sell them as a package, at over £50m, to British Airways.
Nick Wyatt of GlobalData said: “We don’t yet know the cost of the deal, what terms can be agreed with landlords for example, but this was most certainly a buyer’s market situation so Hays should have been able to negotiate favourable terms.
“Hays should be able to operate without the millstone of debt round its neck and the publicity around the Thomas Cook collapse may even spur people to seek out Atol-protected package holidays for peace of mind, which will play into Hays’ hands.
Hays Travel, based in Sunderland, began with a single shop in Seaham, County Durham. Its heartland is northeast England but expanded into the south with the purchase of Bath Travel. The latest acquisition will give it a nationwide presence and treble the number of travel agents.
But it will also mean that in some high streets it will have more than one store, with rationalisation a possibility at some point in the future.
The speed of the Hays transaction will raise further questions about the collapse of Thomas Cook. The company had been struggling beneath an immense debt burden for years. Had it sold its high street travel agencies or, indeed, its airline, Thomas Cook may have been able to survive long enough to turn around the business.
The move will also increase calls for travel firms which run out of cash to be kept going under “creditor protection” while buyers are sought for healthy parts of the business.
Thomas Cook’s airport slot portfolio, especially at Gatwick and Manchester, is also likely to be the target of multiple bids.
Separately, British Airways has begin moving in on the former Thomas Cook Airlines network. BA has announced new services from Gatwick to Antalya – a key destination for Thomas Cook before its failure – beginning in March 2020.
The airport serves a string of resorts on Turkey’s Mediterranean coast.