Virgin Direct, the financial services company set up three years ago to break the stranglehold traditional providers had on the market, could launch overseas as soon as next year.
Martin Campbell, Virgin Direct product development manager, says the company’s ambitions include the US, Canada and parts of Europe, where the Virgin brand already enjoys a high level of awareness.
Campbell says: “We see the Virgin Direct concept as an ideal commando unit. Virgin has a prominent position across Europe, but particularly in France. The US already has Virgin Cola, Virgin Atlantic is adding more routes, and Richard Branson has a very high profile – he even starred in an episode of Baywatch.”
The opportunity to gain a foothold in North America was one of the key reasons for Australian Mutual Provident Society (AMP), taking a 50 per cent stake in Virgin Direct in November 1995, according to Campbell.
However, Australia has been ruled out as an opportunity for Virgin Direct, as AMP already has a stronghold on the market, which is more sophisticated than in the UK.
Rowan Gormley, the chief executive of Virgin Direct, will spearhead plans for international expansion. Gormley recently appointed a new managing director, Simon Clegg, to handle the day to day running of the company, allowing him to look at the longer term strategy for Virgin Direct.
International expansion is expected within two to three years, but Campbell says it could happen sooner. “Who knows, if the tactical opportunity arises in spring it could happen then.”
However, Virgin Direct will have to address its problems in the UK before expanding. It has already suffered estimated losses of 20m, which it has blamed on start-up costs.
Last year the company sent a team to South Africa to examine the opportunities for expansion, but plans for this area have been shelved.
Virgin Direct was set up in the UK to sell Peps over the phone. Now it also sells pensions and life insurance.
News Analysis, page 22