Success may have many parents, but the failure of the world’s oldest holiday firm is certainly an orphan, if you believe Thomas Cook’s former bosses.
Manny Fontenla-Novoa, who ran the company from 2003-2011, was categorical that he’s not to blame, telling MPs that his merger with rival operator MyTravel made sense.
There’s one problem with this theory: Thomas Cook collapsed because its debts were too high, and because it hadn’t adjusted to the modern, digital, holiday market.
Harriet Green, his successor, put her finger on the problems – explaining that by 2012 Thomas Cook was reeling from a series of profit warnings and lacking a strategy to target millennials.
She changed that, before falling out with the board and leaving after under three years. According to Green, Thomas Cook would have been better served sticking with her approach.
Instead, Green was left “incredibly sad” when the chairman basically gave her the push in late 2014. That, she believes, was a mistake as it undermined the transformation plan.
But she did concede that she could have pushed the that plan even faster (though more board support would have helped!), and put more resources behind augmented reality tech to get people into stores.
Former CFO Bill Scott faced some rigorous questioning, around Thomas Cook’s controversial habit of recording large amounts of goodwill on its books (much dated back to the MyTravel deal).
Scott conceded that, with hindsight, some of it should have been written off earlier than May 2019, after a deterioration in trading. MPs, though, pointed out that a summer heatwave can have such impact, the goodwill wasn’t really there in the first place. So were the accounts actually accurate?
Luke Hildyard, director of the High Pay Centre, isn’t impressed by the excuses reeled out today:
Luke Hildyard
(@lukehildyard)Thomas Cook execs at the Select Committee (paid £20m+ between them) have thus far blamed their predecessors, their successors, the global financial crisis, the Icelandic ash cloud and the 2018 heatwave for the company’s failure. Impressively thorough!https://t.co/Jv83anD3f0
Significantly, the auditing regulators also voiced concerns about this issue — too late for Thomas Cook’s staff and customers, alas.
We also got more insight into the liquidation of Thomas Cook. So far it has cost £11m in fees paid to special managers, who only manage to raise £6m for the company’s network of high street stores.
