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Towards omnichannel: Thomas Cook, Aurora Fashions and Shop Direct Group reshape

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The omnichannel future of retail came further into focus this week as retailers from Thomas Cook to Aurora Fashions took major steps towards reshaping their businesses.

Travel agent Thomas Cook announced that it was to close stores and cut up to 2,500 jobs in a move intended to rightsize its business for a future shaped around a range of distribution channels, while Shop Direct Group was reported to be consulting on the closure of its Worcester and Preston call centres, putting more than 700 jobs at risk, as call volumes fall in the light of increased online shopping.

At the same time, Aurora Fashions also unveiled a delayering in the management structure of its retail brands, preparing them for an omnichannel future in which Aurora itself will cease to exist.

Both Thomas Cook and Aurora Fashions say their moves are aimed at cutting costs while making their retail brands more agile and equipped for a customer-focused future.

“It is never easy to make decisions that impact directly on our people, but we also owe it to our customers to shape the business effectively and ensure that, when they book their holiday with us, our administrative costs are as low as possible,” said Thomas Cook’s Peter Fankhauser, chief executive, Continental Europe and UK.

“As we improve and develop our online capabilities, maintaining a strong presence on the High Street is an important part of our omnichannel strategy. Even after these changes we will still have one of the largest retail networks in UK travel.

“It is essential that we operate with the right number of people as we move forward into the next era for our company, allowing us to meet the future needs of our customers more effectively.”

Aurora’s chief executive Mike Shearwood said the move to spin out the Coast brand, and form a new parent company for a combined Oasis and Warehouse brand was part of a move away from a focus on bricks and mortar, towards a balancing of all the distribution channels. “Retailing is no longer about gearing your operating model around bricks and mortar, something we have realised as a result of our omnichannel success,” he said.

“Instead, our businesses must adapt and utilise a number of distribution channels to ensure we continue to capitalise on the changing global retail environment.”

Shearwood said the changes would result in “independent, agile organisations, where the management teams have full control and autonomy to deliver their strategies so that they can provide their global customer base with more choice.”

Aurora, which currently owns the Coast, Oasis and Warehouse brands, is to spin out Coast as a standalone business, while starting a new parent company, Fresh Channel, to run a combined Oasis and Warehouse. This will be run by Liz Evans, currently managing director of Oasis, in the role of chief executive of Fresh Channel. The aim of combining the two is to benefit from economies of scale and allow faster innovation.

The senior Aurora management team will continue in place over the next year to 18 months as the transition takes place. Once the process is complete, however, Aurora will cease to exist.

Under the new organisational structure , Coast will develop a position as an occasionwear specialist, with flagship store openings, a new website and international expansion. Meanwhile, Coast and Fresh Channel will be able to capitalise on the changing dynamics of channel share while cutting costs.

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