Ever been stuck out in the sticks in a foreign country with no money and a cash card that does not work? It is at that moment you begin to wonder just why you failed to think ahead and buy some travellers’ cheques. That’s where Travelex comes in.
The company was set up 27 years ago in a single unit on London’s Southampton Row by Lloyd Dorfman, an ambitious young entrepreneur.
Legend has it that Dorfman’s enterprise was virtually a one-man show in those early days. Now, annual turnover is approaching £500m, the company runs more than 600 branches worldwide while Dorfman himself still owns 63 per cent of the shares.
General counsel James Birch has had a busy 2004, with Travelex expanding its goals to target the financial market head-on.
Since the company bought out the financial services wing of primary competitor Thomas Cook in 2001, the approach to expansion has been progressive. Synonymous with high street travel in the UK, Thomas Cook is three times the size of Travelex and, as Birch explains, it was only with sheer persistence that it was able to get in the door.
Further acquisitions have followed, including the latest project in March this year, involving the multimillion-pound purchase of Dutch bank GWK after what Birch describes as “long and protracted negotiations”.
GWK, a subsidiary of international finance service provider Fortis, was founded in 1927 as a foreign exchange, but developed into a large-scale cash money service provider, boasting 50 branches throughout the Netherlands.
The acquisition, handled by Dutch firm Loyens & Loeff, is indicative of the expansion programme undertaken by Travelex over the last few years. Taking on marketplace rivals of the calibre and sheer size of companies such as American Express is quite an undertaking, but Travelex and Birch himself are satisfied that it can be done. The first step is to promote business growth in targets away from the US, the UK and Asia, and the GWK deal will surely be perceived as a foot on the ladder.
“We’ve evolved during the journey of the last few years and the company has become a much more sophisticated animal,” explains Birch. “It’s no longer just about retail, but a much broader business now.”
The facts bear out the general counsel’s assertion. Travelex is now the second-largest operator of travellers’ cheques after American Express.
A groundbreaking new scheme is also due to hit the streets in 2005.
The cash passport will be to foreign currency what the pay-as-you-go mobile phone is to the telecommunications industry, a pre-paid card accepted in outlets worldwide and useable at cash machines via the Visa symbol.
Aimed at what Birch says is a large section of the tourist market, the passport offers an alternative to splashing out abroad with credit cards and travellers’ cheques, both of which are easy prey for fraudsters.
The new card could also be good news for small businesses keen on simple expansion, as little hardware or training is required to stock it.
Birch does not believe in the need for a panel of law firms, preferring to employ a range of firms according to the nature of the work and using the seven-strong in-house team as much as possible.
“We have a very hands-on legal team here and we try and do as much as we can in-house,” explains Birch. “I do try to get involved across the spectrum.”
That team comprises four London-based lawyers, including two senior counsel, a company secretary and a head of money transfer, as well as one lawyer at the company’s sizeable Peterborough offices and two more in the US and Canada, where there is scope to recruit another lawyer.
London-trained Birch, 40, earned his stripes in Freshfields Bruckhaus Deringer’s corporate division, where he spent nearly five years before moving to his first in-house role at mining giant Rio Tinto in 1993.
Following some time in India, Birch then took on the mantle of legal director at Warner Bros at a time when the cinema giant was expanding rapidly to capitalise on the burgeoning appeal of the multiplex. “It was incredibly fast-moving there,” he explains. “We wanted to build cinemas that appealed to the masses, so we were out on that bandwagon trying to build as many as we could.”
Then came the opportunity with Travelex following a chance meeting with Dorfman at Lord’s Cricket Ground.
“I was a little bit frustrated by not getting involved in the real nitty-gritty of the deals. I’d really been someone who effected things rather than someone who understood things at the deepest level and made them happen,” explains Birch.
He adds: “The opportunity at Travelex was very exciting. It’s a highly innovative company that has come from nowhere in just over 25 years in a regulated and often very complicated sector. We’re not a bank, but as an organisation that provides services to a string of financial institutions, we’re very close to the regulated sector and we do have a lot of compliance issues to deal with.”
The general counsel role at Travelex extends beyond the legal department, with Birch taking an active role in other areas of the business. “I sit on the operating board and the risk committee, and I’m expected to contribute at that level too, not just on the legal side,” he says.
Birch is certainly not fazed by the intimation from some sections of the legal sector that suggest in-house positions usually attract those who cannot quite make it to the top job in private practice.
“You see these hugely successful rainmakers from time to time and they’re moving from one sexy deal to the next, so it’s inevitable you find yourself wondering what might have happened if I’d stayed,” he concedes. “But on the whole, I’m very happy where I am.”
|Annual legal spend||£1m|
|General counsel||James Birch|
|Reporting to||Chief financial officer Clive Kahn|
|Main law firms||Beachcroft Wansbroughs, Dechert, Doyle Clayton, Greenwoods and Lovells|