The Interview: The man who makes the world's money go around

Lloyd Dorfman, founder of Travelex
Click to follow
The Independent Online

When Lloyd Dorfman opened his first foreign exchange shop in central London in 1976 he was faced with an immediate problem. Whenever he wanted to nip to the loo he had to close the shop and dash to a nearby hotel, such were the confines of his initial bureau de change.

When Lloyd Dorfman opened his first foreign exchange shop in central London in 1976 he was faced with an immediate problem. Whenever he wanted to nip to the loo he had to close the shop and dash to a nearby hotel, such were the confines of his initial bureau de change.

In the ensuing 28 years Travelex, the business he founded in that long hot summer, has ballooned to 700 shops around the world.

These days, however, the company's ubiquitous money-changing kiosks account for only about a fifth of the foreign exchange empire Mr Dorfman has built; an empire he agreed to share last week when he sold half his 63 per cent stake to Apax Partners, the private equity fund.

The deal has netted him £300m but he has kept a 30 per cent stake in the company, now valued at £1.05bn including a modest amount of debt. 3i, the other incumbent shareholder, has sold to Apax as well. At 52, Mr Dorfman is not about to quit.

"I've been asked a lot in the last couple of days what I'm going to do, what am I going to do with the money, all that. I don't play golf and I'm not into horse racing. My wife and I are married for life but not for lunch. She certainly doesn't have any plans for me to be at home all the time and I love the business.

"It's the nature of the beast, I'd be bored. It's about a balance of having a meaningful interest going forward and being able to realise some value after 28 years.

"This was not about some unfulfilled lifetime agenda. I don't want to right a book, I don't want to travel more. People travel because it's a treat. For me, staying at home is a treat."

Right now he is more excited about seeing Michael Gambon's Falstaff in Henry IV at the National Theatre, the play that will open this year's season of £10 tickets that Travelex is sponsoring for the third year and which has been filling Nicholas Hytner's South Bank auditoriums to the rafters.

"The National Theatre, the £10 season, was our first arts sponsorship. It's been a great success, the National has been terrific to deal with, it's great for them, great for us and the punters get a great deal."

Travelex launched a similar scheme for the Royal Opera and the Royal Ballet last year so that the top, £175-a-night stall seats can be bought for a tenner.

So is Mr Dorfman a failed thesp? Are his dreams of one day playing the Dane fading fast? Why not dip into the company's funds to fulfil the fantasy - he owns it.

"I've always loved and enjoyed the theatre, but I have to say that none of our sponsorships have been done because I'm one of those chairmen and chief executives who goes gooey eyed about something. They are done for a very specific marketing and commercial agenda."

Likewise the company's sponsorship of the Australian cricket team who will be filling our television screens this summer in the Ashes series.

Anyway, despite the big payday, Mr Dorfman still has plenty on his "to do" list, including his relentless expansion of Travelex, which will now focus on the Far East and Africa. Part of the reason why Apax won the auction for Mr Dorfman's stake is because they brought with them, as a partner, Standard Chartered, the bank that specialises in the regions where Mr Dorfman wants to expand. The two are now busy exploring opportunities to take Travelex further afield.

But there was a time when Travelex's three-pronged business of changing money, supplying foreign exchange to banks and carrying out international payments for companies looked like it could only go into decline.

The introduction of the euro reduced, overnight, the number of major Continental currencies changing hands from 11 to one, with the drachma to follow; hardly the most inspiring background for a foreign currency-based business.

"We always saw the euro more as an opportunity than a threat and our vision was that we would end up with a larger slice of a smaller cake," he says.

In recent years many high street banks have closed their own in-house foreign exchange departments and now contract them out to Travelex. Operators of money-changing kiosks have also quit, most noticeably Thomas Cook, which sold out to Mr Dorfman in 2000 for £440m.

However, despite the introduction of a single European currency, the continued expansion of international travel, and particularly global trade, has allowed Travelex to keep growing even with less currencies in circulation.

"The really interesting thing is that our earnings from our Continental European operations this year, for the first time, will be greater than for the same operations in the year before the introduction of the euro. The reality is the size of the cake has not remained the same."

Far from lamenting the euro, Mr Dorfman has had cause to celebrate. However, on a personal level he is a businessman who has his doubts about the single currency and what it represents.

"From a personal point of view, and I'm trying to say this with as much objectivity as I can muster, I genuinely believe that the concept is flawed. The rules surrounding it seem to be honoured in the breach. There was that wonderful example last year of France and Germany breaching the stability and growth pact but because it was them, that was okay. So I do have a fundamental concern about us losing control of our own destiny and this is not just about the euro. You can expand and extend it into the whole constitutional issue. The British people have been suckered with regard to how the whole currency and constitutional issues have been sold to them.

"By all means let's have free trade and no trade barriers and a common market. But where did it all suddenly become about our own economic and political destiny being surrendered to Brussels with agendas that arguably have very little to do with the interests of the British people and British voters?"

Despite his own misgivings about the euro and Brussels, he has managed to keep Travelex growing even through the aftermath of 11 September, the Sars virus and the ensuing downturn.

"Pure, raw, self-belief," says Mr Dorfman, explaining the qualities people will require to emulate his zero-to-billion-pound company feat.

"There are four recurring themes. One is persistence, not always taking 'No' for an answer. Second, stick to what you know and who you know and by and large you should stay out of trouble. Thirdly, conventional thinking will only ever produce conventional results. If you are going to think the same as everyone else and do the same as everyone else you will end up being the same as everyone else. In today's competitive environment you have to think a bit differently."

The fourth is his homage to self-belief, a characteristic that has delivered several key milestones in his near 30-year career. In 1986 he forced his way into Heathrow's Terminal 4 as the first independent foreign exchange operator and in 1994 he won a crucial contract to supply Abbey National's 750 branches with their foreign currency needs - both transforming deals of greater relative importance than the 2000 acquisition of Thomas Cook.

"In that lonely moment of self-doubt, it's about having the self-belief to think that actually, if we're up for anything, we're up for this."

Traveller's checklist

Position: Chairman and chief executive of Travelex.

Age: 52.

Education: St Paul's, London and Bradford University.

Career: Joined the investment bank First National in 1973 but lasted only three years before deciding he had to fulfil his ambition of running his own business. He opened his first Travelex shop in Southampton Row with a £25,000 loan from a friend who he refuses to identify. The friend was repaid after three years. Travelex is now worth £1.05bn.

Pay: According to Travelex's latest Companies House accounts, Mr Dorfman was paid £1.4m in 2002 but then took a pay cut in 2003 to £445,000 as trading conditions worsened. However, his salary is nothing compared with the £300m he has cashed in from selling half his 63 per cent stake and he still retains about the same amount in the company.

Personal life: Married with three children.

Hobbies: Theatre, travel and staying at home "for a treat".

Comments