Travelex Retail Foreign Exchange began operating in SA through FX Africa (FXA) in August this year. It was the UK-based retail foreign exchange company's first franchise deal ever.
Travelex is the world's largest retail foreign exchange company - with more than 700 branches operating in more than 30 countries worldwide.
"Travelex decided to franchise in SA because it was impressed with our strong regulatory environment through the Reserve Bank," says Travelex Retail Foreign Exchange SA MD Darren Jenkins-Ferrett.
WHAT IT MEANS
 Has 22 branches across the country
Expecting over R1bn turnover this year
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Like many companies, FXA was started by an entrepreneur. Sean Maloney, who remains a significant shareholder, opened a bureau de change in Victoria Falls, Zimbabwe, in 1995. In 2002 that country's government closed down all the bureaux de change due to suspected excessive expatriation of foreign currency. Foreseeing the problem, Maloney purchased Prestige Bureau de Change in SA, rebranding it FX Africa. Prestige had one branch in Pretoria and one in Musina. These two branches still exist, and are part of the 22 Travelex retail outlets in SA. "We have tendered for a store at O R Tambo International Airport," says Jenkins-Ferrett.
He says that when he joined in 2005, FXA was growing but "had not made the impact on the market Maloney had hoped for". As marketing director for American Express in SA, Jenkins-Ferrett had a lot of expertise to offer. "As it was, I was looking for a new challenge, having worked for a mature company for some time."
The business plan focused on increasing sales and expanding the branch network into high street shopping malls in favour of outlying tourist destinations. "We wanted to go beyond the tourist market and capture the outbound SA market," he says.
The tie-up with Travelex signals FXA's coming of age, says Jenkins-Ferrett. "It confirms to the wider business community our credibility and commitment to innovation."
The target market of Travelex SA operated by FXA is the upper LSM, high-net-worth individual, he says. "Our list of clients includes travel agents, with whom we have national deals; corporate clients, who make extensive use of our delivery service; retail branches that service South Africans going on holiday and need foreign currency; and the incoming traveller, from whom we buy foreign currency."
Since the repositioning, the company has grown exponentially, says Jenkins-Ferrett. "We expect turnover of well over R1bn this year. We attained a growth rate in excess of 80% last year and expect 60% this year."
With growth has come expansion to 22 branches - 19 retail and three corporate - and a 50% increase in staff count from 60-90. "Because this is a low-margin, high-volume business we have not had to double staff to manage the rapid growth of the company. Also, whereas some outlets were operating at under-capacity, they are now operating more efficiently."
Jenkins-Ferrett adds: "We have also employed more high-end staff to manage specific portfolios, such as sales and treasury."
There are many benefits and synergies in the tie-up with Travelex, he says. "The first is that we now have global expertise and local knowledge. We have upgraded our IT through Travelex's systems, and have adopted their benchmarks. Being a franchise means we have uniforms and set standards according to Travelex's codes of ethics and core values."
The company offers more than financial services. "Whereas most retail foreign exchange outlets are a carbon copy of banks, Travelex is a proper retailer," says Jenkins-Ferrett. "Our consultants, rather than being simply order-takers, have knowledge about the travel industry. For example, when a customer purchases foreign exchange, they will ask where he is going. This is because, for example, travellers cheques are virtually useless in some countries, and cash or a bank card may in fact be a better option."
Travelex uses travel publisher Lonely Planet to provide information from its database. " We do not offer a bargain basement service but we offer more on service and remain competitive in the market."
After the launch party in August to celebrate the link-up with Travelex, the new-look company's advertisements hit the media. The radio and print ads feature sports personalities such as England rugby fly half Jonny Wilkinson, Australian cricketer Adam Gilchrist and former tennis great John McEnroe proclaiming their trust in Travelex.
The ads are part of the international campaign - Travelex sponsors Australian cricket, among others. "The ads are a little provocative, as some of these personalities are people South Africans love to hate," says Jenkins-Ferrett. "But we think they get the message across that we want to convey - namely, trust in the company."
