First Choice creates 1,100 jobs

FIRST CHOICE Holidays is to create 1,100 jobs and undertake a major expansion of its direct-selling operation in a bid to retain its number three position in the UK holiday market.

Chairman Ian Clubb, who announced the expansion alongside an upbeat trading statement, said the pounds 60m investment reflects the need for First Choice to sell a significant portion of its holidays directly to its customers following last December's decision by the Monopolies Commission to allow directional selling .

Directional selling allows tour operators that own distribution arms, such as Thomson Travel with Lunn Poly and Airtours with Going Places, to give priority to products from their parents ahead of competitors.

Peter Long, First Choice's chief executive, said the company will open shops in all the main UK airports.

As part of this plan First Choice yesterday unveiled the acquisition of JN Baker (Bakers Dolphin), one of the leading travel agents in the South-west for pounds 12.6m, the acquisition of a 19.5 per cent stake in Hays Travel and a 25 per cent stake in Holiday Hypermarkets, which operates four stores in Bolton, Telford, Walsall and Wolverhampton.

Fifty shops around Gatwick, Luton and Stansted will also open by the end of 1999, with another 50 by end 2000.

The expansion will result in a pounds 4m post-tax charge in each of the first three years but will be positive in the fourth year.

First Choice is number three in the UK holiday tours market behind Thomson and Airtours, but will slip to fourth place if Thomas Cook's planned acquisition of Carlson Companies Inc's UK travel agency network goes through.

First Choice also reported that current year trading remains strong. Mr Clubb said results for the year to end October will be in line with expectations.

Sales for the winter season 1998/99 are 6 per cent ahead of the previous year with 50 per cent of the programme already sold. The shares rose 11.5p to 101.5p.