Club Med dives into a big loss

PHILIPPE Bourguignon, the Monsieur Fixit of the French leisure industry, came under fresh pressure from shareholders today after unveiling a e70m (£43m) loss and scrapping the dividend at holiday resorts operator Club Mèditerranèe.

Bourguignon, who was brought in to the company after turning around Disneyland Paris, blamed the deficit on falling demand in the wake of the 11 September attacks and high closure costs. He also warned the upmarket resorts would suffer in the current financial year because of 'continued hesitation among customers'.

The loss, the first for four years, compares with a profit last time of e59m. Club Med set aside e60m to cover the cost of closing 17 resorts and cutting 243 jobs. Operating profit halved.

Analysts said the company's problems were not entirely due to the difficult economic background and that Bourguignon would have to do more if he was to keep his job. He has been accused of overspending on acquisitions and new club openings and diversifying into riskier ventures such as fitness clubs and meditation centres.