Barclays PLC is bringing home some of the lessons its U.S. card unit has learned about building affinity partnerships.
Wade Jones, who was the senior director of segment management at Barclaycard US' Wilmington, Del., headquarters, was appointed the managing director of U.K. partnerships for Barclaycard on Oct. 15. He is to move to the $2.2 trillion-asset banking company's London headquarters once his visa application is approved. The assignment is expected to last two years.
This cross-Atlantic knowledge sharing underscores Barclays' growing confidence in Barclaycard US, which is expected to be marginally profitable for the first time this year and to make $150 million next year.
In an interview last week, Lloyd M. Wirshba, the chief executive of Barclaycard US, used a baseball analogy. "We are out of the minors and into the majors, which means the lineup has to change and the batting order has to change," he said. "I think that is what you are starting to see in terms of a structural standpoint and a people standpoint."
In January Colin Graham, then an assistant director of business development for Barclaycard in London, moved to Wilmington to better oversee the unit's integration into the parent company. He was appointed Mr. Wirshba's chief of staff in July and described his role as being like the "right-hand man" to the chief executive.
Mr. Graham had led the Barclays team that bought Juniper Bank in 2004 and was a liaison to the card issuer as it was merged into Barclays and renamed Barclaycard US. "When you buy a small start-up company like that," he said, "you need someone … to make sure the guys at Juniper are easy to speak to in the U.K. and also to make sure the … right level of governance and policies were put in place without burdening the business with too much control at that stage."
In doing so, Mr. Graham said, he "got to know the people at Barclaycard US very well" and was thought to "be a pretty good interface" between the unit and the parent company.
In June, Richard Sommers, a longtime Barclays veteran, completed a two-year posting as the U.S. card unit's chief financial officer before retiring from the company. Barclays said it is searching for a successor.
In the United Kingdom, Mr. Jones' task will be to build the same type of affinity partnerships that have helped establish Barclaycard as the 12th-largest U.S. card provider, as measured by outstandings, since it was formed three years ago.
In an e-mail, he wrote: "The partnership business in the U.K. is not as mature as in the U.S., which suggests there is significant room for innovation and growth. On the surface, the regulatory environment in the U.K. has made it more challenging to deliver as much loyalty value to customers as in the U.S. In my view, this only presents a tremendous opportunity to think about the business in new ways."
Eventually, the U.K. affinity market could be as big as the one here, he wrote. "There is no reason that over time it will not represent the same mix of business as it does in the U.S."
Alison Smithie, a cards research manager at Lafferty Group, a London consultancy, said the U.K. market for affinity cards has grown 15% in the past five years and is poised for further growth.
Barclays controls about 16% of the U.K. card market, according to Lafferty, with 10.8 million cards in circulation.
In the United States, Barclays has custom-designed affinity programs for about 60 partners, including products like the combined MasterCard-discount card for the bookseller Barnes and Noble.
Barclays has also introduced an instant-approval line of credit that can be tapped by users of Travelocity.com when they buy plane tickets from the Web site.
Mr. Wirshba said his unit would continue to focus on affinity cards, where it sees room to grow, but also plans to introduce debit and prepaid products "shortly."
The unit still has no plans to issue a Barclays-branded card, he said, but will continue to market Juniper-brand credit cards by direct mail — a carryover from the days when Juniper was independent. A Visa card issued by Juniper is also available for financing computer and software purchases from Apple Inc., according to Apple's Web site.
Mr. Wirshba said his unit has done well in the affinity market by offering a "customized, tailored solution" for its partners that competitors might not be able to match, or to put together as quickly.
The idea is that a bigger company with thousands of affinity partnerships and systems that are 20 years old would have a harder time customizing programs than his outfit, which was founded only seven years ago and has newer technology.
"We are not a machine," Mr. Wirshba said of Barclaycard US' speed and efficiency in taking partnerships to market. "We are able to be flexible and nimble, but we have the muscle behind us to be able to compete against the B of A's, the Chase's, and the Citi's."
He did not sound concerned that expanding the unit into a Top 10 card issuer — a goal that has been set for Barclaycard US — would affect the nimbleness and flexibility he takes pride in, however.
To keep its competitive edge, he said, Barclaycard US must insure that the "infrastructure is in place to deliver on our promise and handle that growth."
