Liberty Travel will close about 30 stores, or 15% of its 197 retail locations, in underperforming markets, said President Cathy Pelaez.
Liberty aims to realign operations and grow from a position of strength "rather than deplete assets with underperformers," Pelaez said.
The shutdowns will occur in Florida, Illinois, Maryland, New England and Upstate New York. Liberty is not necessarily leaving markets altogether, but is consolidating some offices or opening new ones in order to be "in locations that fit our future."
She said Liberty seeks locations in an "engaging retail environment" and with high walk-by traffic.
When locations are consolidated, Liberty will strive to keep the best employees from each outlet, Pelaez said. Restructuring has so far resulted in the loss of 180 jobs, she said.
Flight Centre, an Australian company, has owned Liberty and Gogo Worldwide Vacations since February. At Flight Centre's annual general meeting on Nov. 3, Shannon O'Brien, the company's acting CEO, said outlets in undesirable locations will be closed for "a stronger shop network as our platform for future growth."
Meanwhile, Liberty has been a drag on the company's earnings. In the second half of the year, Flight Centre expects to record losses from Liberty in line with those recorded in the first six months of 2008, while further restructuring and integration is under way, O'Brien said.
More specifically, Flight Centre said it expects that Liberty will lose 15 million Australian dollars (about $10.2 million) in the second half of 2008. During the first half of 2009, O'Brien said he "expects that the improvements we are making in Liberty will gain traction."
When Flight Centre bought Liberty, its plan was to become "the largest offline travel agency in the U.S." Pelaez said the shutdown of underperforming locations does not mark the end of that growth strategy "by any stretch of the imagination."
She added that Liberty recently opened a location in Massachusetts, and that another will open soon on New York's Long Island. Lease negotiations are under way for two more, she added.
Liberty Travel ranked No. 10 on Travel Weekly's 2008 Power List with $1.77 billion in sales.