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‘No we won’t close 135 stores’ says Flight Centre

March 22, 2017 Headline News No Comments Email Email

Flight Centre has rejected suggestions it should close 135 retail stores throughout Australia to boost growth.

The suggestion was made by the financial group Macquarie, which said Flight Centre’s total transaction volume per store had not grown since 2012 and additional store openings had been “dilutive to sales productivity”.

Macquarie’s pronouncement was carried in the Australian Financial Review, along with Flight Centre’s dismissal of it.

“To return to same store growth as seen in 2012, Flight Centre would need to close the number of stores it opened in the period from 2012 to 2016,” Macquarie said.

“This equates to approximately 20% of the current total of 1536 teams. Given Flight Centre has 678 physical locations, this would mean closing 135 stores.”

Flight Centre strongly disagrees and has questioned Macquarie’s methodology, assumptions and calculations.

“We have advised Macquarie of these issues,” Flight Centre spokesman Haydn Long told the paper.

Long said Flight Centre regularly reviewed its property portfolio and saw no need to close 135 stores in Australia. “We’d basically be closing profitable businesses.”

Flight Centre has already admitted that discounting and exchange rate volatility make conditions challenging (it reported a lower AUD 74.4 million pre-tax profit this half)  but says there have been strong ticket volumes across all sales channels.

Written by Peter Needham

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