Sun, 17 Feb 2013 | DIVISION SALE
Travel company Thomas Cook is considering the sale of its Neilson specialist ski business, according to a report in the Sunday Times.
The Neilson arm mainly organises ski holidays, but also offers summer lakeside, mountain and sailing trips.
Shortly after taking over as CEO of Thomas Cook in July 2012, Harriet Green revealed her plans for a shake-up of the travel company. By the end of December, Thomas Cook had reduced its net to £1,559m, down by £86m year on year. It has achieved this largely by improving gross margins and reducing overhead costs.
The market responded with the share price rocketing from £16.50 on her first day at the office to £90.25 today, representing a current valuation of around £800m.
Over the past few months Green has carried out a strategic review of every part of the business, with particular focus on some of the specialist units. As well as Neilson this includes the Gold Medal brand, run through travel operators, and its sub-brand Netflights.com, which sells direct to consumers.
Shedding these specialist units is thought to be a relatively easy task, but most importantly it will both accelerate the debt reduction process and achieve overall brand objectives. In the last interim statement issued on 7th February, Green gave away her thoughts behind the current strategy of the travel business: “As we continue to strengthen Thomas Cook and determine our profitable growth strategy for the future, the power of our brand remains key to the transformation”.
Concerns that Thomas Cook may be missing out on the valuable middle class skiing niche are mitigated by the fact that there is quite probably more money in winter sun holidays. Searches on the Thomas Cook website for winter holidays to the Canary Islands are 17 per cent up on a year ago, a statistic that won’t go unnoticed by Green, who has become quite the darling of the turnaround community.
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