Robert was surprised. “I thought: Holy shit. If car dealers are talking about credit scores to my cute little blonde wife, we are really on to something here,” he said.
What he was on to was the burgeoning business of credit rating, the secretive process that scores you financially and can determine if you get a personal loan or mortgage.
Ten years on, Robert is bringing Experian, the huge American credit-checking and business-services group that he heads, to England and a flotation next month on the London Stock Exchange.
Experian is being demerged from its parent company, GUS, the conglomerate that also owns the retailers Argos and Homebase. Its newly independent chief executive will preside over a company with revenues of more than $3 billion (£1.6 billion) that analysts estimate will be valued between £7 billion and £9 billion. Experian looks set to become one of the 50 largest companies on the London market, adding its chief to the ranks of high-profile Americans running British businesses.
Experian is best known as the world’s largest credit-scoring agency, but its reach has expanded. It now deals in all sorts of valuable, and often highly sensitive, financial information — offering its services to corporate clients and, increasingly, to consumers.
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A typical retail transaction — say, buying a camera — could be affected by half-a-dozen of Experian’s businesses. For example, its Foot Fall division could help a retailer choose the best location for a camera store. Two other businesses — Simmons and Vente — might help the retailer select its product ranges. Clarity Blue could identify consumers most likely to respond to advertising. And the customer could end up paying for the camera with a credit card approved after Experian’s credit checks.
Much of Experian’s business is done anonymously for big clients such as American Express, HSBC and Vodafone. Until recently Experian was overshadowed by its less remunerative but far more glamorous stablemate, Burberry. GUS demerged Burberry in 2005 and the clothing and accessories company has gone on to have a successful, if sometimes rocky, solo career.
Robert is confident that Experian can also bloom away from its parent and is looking forward to the London move. “Not many people get the opportunity to live and work in another country,” he said, adding that London was ideally situated for a global business — it is halfway between the developing markets in the east and North America.
But he is wary of the exposure the demerger will bring. “My job will change for the worse,” he said. “We have been shielded to a great extent by GUS. It will be a big change being a public company.”
Robert, 47, joined Experian as chief operating officer in 2001 from First American, a business-information group, becoming chief executive of North America in 2002 and global chief in 2005.
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He has concentrated on making sure Experian’s businesses act as one. “Five years ago, if American Express called a meeting to get information, many of the Experian people would see each other for the first time at that gathering. It was very, very embarrassing.”
When he took over, Robert called in his top 15 sales people and charged them with making sure the company got better at meeting clients’ needs.
Experian also started dropping its non-core investments. One of them, Metromail, was a publisher of direct-mail advertising. “We had acres and acres of printing presses printing direct mail. There was no reason for us to be in that business,” said Robert.
Then, after the terrorist outrages of September 11, 2001, America was hit by a wave of anthrax attacks. Five people were killed after opening or coming into contact with contaminated mail.
“Anthrax almost brought our business to its knees,” said Robert. “People were afraid to open their mail.” Metromail was sold along with other businesses that Robert described as of “dubious financial value”.
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Having trimmed the fat, it was time for Robert to go on a shopping spree. Experian has bought 20 companies in the past four years at a combined cost of $2.7 billion.
Robert’s first purchase was Consumerinfo.com in April 2002. With the financial markets in turmoil after September 11 and the collapse of Enron, most investors were avoiding any company linked to the internet. “Thank God for GUS,” said Robert. “We needed to be aggressive and opportunistic, and GUS was there for us.”
The purchases have expanded the company’s reach in business terms and geographically with the addition of the e-mail marketing firm Cheetah Mail and the price-comparison websites Price Grabber, for shoppers, and Lower My Bills, for financial services.
In America, credit ratings are all-important — a good rating can get you a better deal on loans; a bad one can mean rejection. Consumers are bombarded with offers to check up on their scores and to improve them.
It is big business. Experian’s credit-services division had revenues of almost $1.5 billion in the most recent financial year.
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British consumers are also increasingly interested in their credit ratings and Experian is making inroads in the Far East.
Credit is a cyclical business and Robert hopes his broader portfolio of businesses will see off critics who believe the group is at the top of its cycle.
In recent years, as demand for credit has soared, the demand for credit-checking services has exploded in Experian’s two largest markets — America and Britain. There are now signs that consumers’ appetite for credit is waning.
“There are cyclical and counter-cyclical elements to this business,” said Robert. In America, mortgage-loan applications are down but lenders have a greater need to monitor defaults. The emphasis changes from getting new customers to managing the clients they already have.
Now the new expatriate Robert is turning his eyes to the east. Today, 58% of Experian’s business is in America but Robert is excited about the growth prospects outside America.
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“China has 1.4 billion consumers who are all starting to look remarkably western,” he said. “And (they) are a lot easier to reach from London.”
Robert’s family has already made a reconnaissance trip to their soon-to-be-adopted country. By the end of the holiday, Robert’s California-raised seven-year-old son was already saying “lorry” instead of “truck”, “boot” instead of “trunk” and “takeaway” instead of “to go”.
“Kids are quick learners,” said Robert. He must hope that he and his business will adapt as fast.