NEWS — SPECIAL REPORT
Kuoni UK ends speculation about its future by securing a German parent. LEE HAYHURST reports
Securing a trade buyer with no UK interests was probably the best outcome for Kuoni, according to the operator’s UK chief. Derek Jones, Kuoni’s UK managing director, said the deal – the completion of which is subject to regulatory clearance – removes any uncertainty about the future. Jones said it was too early to
talk in detail about what the sale means for Kuoni’s strategy, but he indicated Rewe had bought into the vision presented by the UK management team. “They do see the acquisition of the UK part of Kuoni as establishing a UK footprint, which broadens their European distribution business,” he said. “From that perspective it’s a good fit with everything else they do. We have got to know them reasonably well as part of the sales process. “We understand their business model and they understand ours, and they had the confidence to take the deal forward. “What’s interesting, and possibly reassuring, for our trade partners is that there’s no other UK business in the group. “This is not about directional selling, or integration with a bigger player in the UK market – it’s as you were with the current strategy. We very much see this as an opportunity to accelerate along the road we have been on.” Kuoni is a very different business in the UK to that which customers in its core market of Switzerland and northern Europe know.
Here it is very much a luxury long-haul tour operating specialist, operating a model much closer to that which it had in Italy, Spain and Russia before it pulled out of those markets. In recent years it has sought to
establish a dedicated retail arm, with implant stores in John Lewis, partner stores with independent agents and its own fully owned store network.
Under Jones it moved to end the distinction between web and high street business by ditching its 5% online discount in 2011. This underpins its “click and
collect” approach, which Jones said supports face-to-face retailing and ensures its agents are not undermined online. “We have set out our style clearly over
the last three to four years
in terms of building a business model which is about experts and relationships,” said Jones. “Increasingly, traditional tour
operators find it more difficult to own the product. We have 50 years’ heritage of building great relationships. We realised that the bit we could own was the customer relationship end of it.” ❯ Kuoni Summit, page 12
WHO IS KUONI’S NEW OWNER?
l Rewe is a major German co-operative, set up in 1927 in Cologne, with significant presence in food retailing, DIY and garden centres.
l The firm is pan-European. It employs more than 33,000 people in 12 countries and owns 15,000 stores. It posted a €51 billion turnover in 2014.
l Rewe started getting into travel in the 1980s but it wasn’t until 2013 that it placed its travel brands in the Der Touristik portfolio.
10 •
travelweekly.co.uk — 25 June 2015
l Der Touristik claims to be Germany’s second-largest tourism group and owns or partners 2,100 agency branches.
l The seven brands in Der Touristik are: Dertour, Meier’s Weltreisen, ADAC Reisen, ITS, Jahn Reisen, Tjaereborg and
Clevertours.com.
l Specialist operator Dertour pulled out of the UK outbound market in 2013, saying the discounting culture made its model unprofitable.
OPINION
Kuoni must now be rationalised
By Chris Photi, head of travel and leisure, White Hart Associates
Kuoni was never going to be a straightforward private equity transaction as it was being offered for sale with substantial net debt. And it was not a group with
current or projected ‘hockey stick’ profit growth, albeit one not without potential. I believe for Kuoni UK
now it is all about improved integration and rationalisation. The companies within
its stable are some of the best brands in recent travel history. However, it is not easy to rationalise a variety of different operators into a new whole: Thomas Cook is living testimony to this. It is a very valuable skill to be able to obtain the projected synergies the accountants so readily forecast. Private equity turnaround specialists would be brutal in this respect. It remains to be seen how Der will approach the situation with Kuoni.
Derek Jones
SPECIAL REPORT
Kuoni: It’s as you were with current strategy
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76