Retail giant Flight Centre Travel Group has taken the decision this month to close down 40% of its retail stores in South Africa, bringing its brick-and-mortar footprint down from 100 to 60 stores. Included in the list of closures around the country are all 11 of FCTG’s Cruise About outlets, which are being fully absorbed into the Flight Centre brand.
FCTG South Africa has made the difficult decision to right-size its physical retail footprint to better reflect the current trading climate. “In the retail sector, we will maintain a network of 60 world-class Flight Centre outlets across the country, remaining the largest travel retailer in South Africa. We will grow our independent model, known as Flight Centre Associates, to 200 Independent Travel Owners and we will continue to grow our online presence and functionality through our well-renowned Flight Centre website,” said the group in a statement.
“This is a very sad time for our industry and a period when there will be no winners. We have been forced to take some very tough decisions in preparation for what we see will be an extended hibernation period of little to no income. At this stage we believe that domestic travel demand will start to trickle back in August or September with very little international travel expected this side of Christmas. This pandemic looks as though it will take our business, and the industry, back 10 years and we predict emergence into a very different landscape, where a vastly reduced number of competitors will compete in a much smaller market,” said Andrew Stark, FCTG md MEA.
“This period has also forced us to fast forward our 2025 plans where we aimed to have a fully transactional website, a larger force of independent consultants and a reduction in brick-and-mortar presence, which is in line with our restructure,” he added.
The move will vastly reduce FCTG’s rental expenses – which exceed R30 million a year – with Andrew saying the group’s retail landlords had been exceedingly accommodating during this period. He added, however, that the backing of a global brand name and the group’s commitment to maintaining 60 stores across the country had assisted with its negotiations.
Store closures are not only taking place in South Africa but globally, with FCTG cutting back on 40 (50%) of its retail stores in various markets. The Cruise About brand – which was shut down in markets around the world a few years ago and only retained in South Africa – will now be fully incorporated into the Flight Centre South Africa retail brand too. Andrew said while Cruise About had been doing well in South Africa for the last few years, the group had been forced to cut back on all “nice-to-have” items and would focus all its retail marketing efforts on the Flight Centre brand.
He added that Flight Centre retail stores had also always sold cruise product.