Thomas Cook checks out of 500 hotels, axes 200 shops

Thomas Cook will close 200 underperforming shops and 500 hotels and is lining up further disposals, as it battles to cut debt and restore confidence among investors and customers after a bailout by its banks. The world's oldest travel firm, which last month secured a rescue package from lenders, said the move was part of a turnaround plan that would deliver an annual profit improvement of 110 million pounds ($171 million). The future of Europe's second-biggest travel firm by sales has been in question since it asked lenders to come to its rescue twice in five weeks, sending its shares into freefall, after it warned of a possible debt default. "We have instigated significant management changes and implemented a turnaround plan in the UK to address our areas of underperformance," acting Chief Executive Sam Weihagen said in a conference call on Wednesday. The company said 660 jobs would be at risk as it closes 200 of its 1,300 shops in Britain. Unemployment in Britain is at a 17-year high, data revealed on Wednesday. Additionally, Thomas Cook plans to cut its airline fleet to 35 from 41, invest more in its online business, and consider more disposals on top of the 200 million pounds of non-core asset sales announced in July. Weihagen said the company would review all its businesses and declined to rule out selling its Scandinavian arm, described by Barclays Capital analysts as its "crown jewel". Thomas Cook is seeking a CEO after the departure of industry veteran Manny Fontenla-Novoa in August, but will press on with the strategic review due to the urgency of its position. "We can't wait for a new CEO to start before we send for a strategic review," Weihagen said. Thomas Cook's banks, led by Barclays, HSBC , RBS and UniCredit, last month agreed to provide a new 200 million pounds credit facility. The company said on Wednesday trading had picked up since then, with summer bookings in Britain up 8 percent year on year, having slumped by 30 percent in the days after news broke of the company's financial troubles in November. "We are very encouraged by that figure," Weihagen said. "It took us a week or so to get back to the booking levels we had before the dip. I'm fully confident that is behind us." Thomas Cook, which has issued a string of profit warnings, said operating profit fell 16 percent to 304 million pounds in the year to September. That was at the bottom end of forecasts in a 306-321 million pounds range, with the average at 317 million, according to a Thomson Reuters I/B/E/S poll.