October 8, 2010 5:15 pm

Mutual bulks up its business

The merger of the
Co-operative’s travel arm with Thomas Cook is the latest stage of the group’s transformation under Peter Marks, chief executive since 2007, writes Andrew Bounds.

In that time the mutual has undergone “the greatest period of change in its history”, according to Len Wardle, chairman.

More

On this story

IN Travel & Leisure

Mr Marks believed the disparate businesses needed to bulk up to improve performance or be sold off. It needed to be commercially successful to spread its ethical gospel.

“The strategic plan was always to create scale in our key businesses,” he told the Financial Times. “We needed more scale in retail so we bought Somerfield. We needed more scale in financial services so we merged with Britannia. Now we are creating scale in our travel business.

“We had good half-year results but one blot on the landscape was travel, which had a difficult year. This is how we are going to deal with it.”

Travel sales fell 6.6 per cent to £126m in the first 26 weeks of the year, with profits down 70 per cent to £400,000.

The group as a whole turned over £6.9bn, with an underlying profit before dividends to members of £260m.

Food and financial services dominate and the group has pulled out of some businesses such as department stores, though electrical goods are sold online. It still has 19 car dealerships, where Mr Marks could next turn his attention.

He admits not all members back his commercially driven approach but believe he has overwhelming support.

Job cuts are inevitable but the group hopes to absorb many of the 250 who work in the travel head office in Stoke within other divisions.

Thomas Cook was a “perfect fit” because it retained its family values, said Mr Marks.

Copyright The Financial Times Limited 2014. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.

NEWS BY EMAIL

Sign up for email briefings to stay up to date on topics you are interested in