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Thomas Cook to close 200 'under-performing' branches following £398 million loss

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Thomas Cook will close up to 200 of its 1,300 stores over the next two years as part of its “thorough review of the profitability of the UK business”.

The travel company this morning announced "exceptional charges" of £573 million resulted in a loss before tax of £398 million (2010: £42 million profit). The charges are largely non-cash and include £428 million of impairments and write-downs. Cash exceptionals were £90m (2010: £158 million).

The company has therefore seen a need for a phased closure of 200 under-performing shops where leases expire within the next two years. A statement said it will continue to review the performance of the remaining portfolio as leases come up for expiry and more customers move online. In addition, it will continue with the modernisation programme of remaining stores to ensure that the brand retains customer appeal.

Sam Weihagen, group chief executive, Thomas Cook Group, said: "This has been a very challenging year for the Group, despite which we still delivered an underlying operating profit of over £300 million. We have instigated significant management changes and implemented a turnaround plan in the UK to address our areas of underperformance. We continue to take action to substantially strengthen the balance sheet and the Board is undertaking a full strategic review. I am confident that these changes will improve profitability and build a stable foundation from which to rebuild shareholder value.

"Customers have been very supportive in recent weeks and are continuing to book with Thomas Cook. Bookings outside the UK were broadly unaffected by news of our refinancing and in the UK bookings have recovered well. For over 170 years Thomas Cook has provided customers with fantastic holiday experiences and we will continue to do so."