Thomas Cook today said it will close 200 stores over the next two years as it battles to turn around its ailing UK business.

It had already said it expects to close about 75 sites following its merger with the Co-op’s UK high street travel business, which left it with more than 1,300 travel shops, but today said a further 125 will be shut.

The group also revealed it had slumped to a £398m pre-tax loss in the year to September 30, compared with a £42m profit in the previous year, after it was hit by poor trading in the UK and the Arab Spring put tourists off travelling to Tunisia and Egypt.

It also wrote down the value of its UK and Canadian businesses.