Co-op Travel brand to leave high street after Thomas Cook buy-out.

Co-op Travel stores will soon come under the Thomas Cook brand after the mutual decided to end the joint travel shop venture.
 

The Co-operative Group said it had exercised its option to exit the business - five years after joining forces with Thomas Cook for the high street stores.

The £50m it is receiving from the sale and £30m in dividends will be invested in its core businesses.

It currently holds a 30% stake in the retail business, with Central England Co-operative also standing to net £5.8m from its 3.5% holding.

The sale means the food-to-funeral mutual will exit the travel market altogether, with Thomas Cook taking full control of the retail estate comprising 764 sites in the UK.

The travel firm said it expected the deal to be completed by November 2017.

While the holiday sector has been a small part of the Co-op's operations amid its revival from a governance crisis in 2013 , the sale comes at a time of caution in the travel industry.

Part of that is attributed to the weakness of sterling since the Brexit vote and the possibility it will put people off taking holidays abroad.

The pound has fallen by up to 20% against the dollar alone since the referendum, making in-resort spending more expensive, though it is currently trading at a two-month high near $1.28 and it has also clawed back some ground against the euro  in recent days.

Thomas Cook recently reported a 41% fall in underlying profits, saying it suffered amid a "difficult year for tourism".

The industry has seen demand for key resorts dampened by terror attacks in Paris and Brussels, while political instability has also hit Turkey.

Thomas Cook said it did not expect any job losses to arise from the ending of the joint venture with Co-op.

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."

Sky News.
Culled from Yahoo News.