Purplebricks

Purplebricks is an online estate agent which operates in the UK, Canada and Germany. Founded in 2012 by Michael Bruce and Kenny Bruce,[2] it is backed by investors that include venture capital firm DN Capital[3] as well as Neil Woodford, Paul Pindar, and Errol Damelin.[4][5]

Purplebricks Group PLC
Public
Traded asAIM: PURP
IndustryInternet & Real Estate
Founded2012
Key people
Paul Pindar (Non-Executive Chairman)
Vic Darvey (CEO)
Revenue£93.7 million (2018)[1]
-£26.2 million (2018)[1]
-£27.6 million (2018)[1]
Websitewww.purplebricks.com

History

Becoming Public

In December 2015, The Guardian reported that Purplebricks was set for flotation, and would début on London's Alternative Investment Market (AIM) on 17 December, with an anticipated valuation of £240 million.[4][5]

In December 2016, it was reported that Purplebricks had made its first profit of £300,000.[6] In the U.K., profit has risen to £5.7 million in the first half of the 2019 financial reporting period.[7]

International Expansion

Purplebricks has expanded internationally. In August 2016 it launched in Australia,[8] and in September 2017, Purplebricks was officially launched in the US.[9]

In 2018, the company purchased DuProprio, a Canadian real estate company that offers commission-free real estate services, for $51 million.[10]

They also launched in Germany that year, as part of a joint venture with Axel Springer. They bought a 25.9% stake in German online estate agency, Homeday.[11][12]

International Financial Losses

In May 2019, Purplebricks vowed to shut down operations in Australia due to lack of profitability, after reporting an $18m interim loss for the six months to October.[13] This came days after the CEO, Michael Bruce was laid off after disagreements with Paul Pindar over the failed overseas expansion.[14]

In July 2019, new CEO Vic Darvey announced that Purplebricks would be shutting down operations in the United States, announcing that operating costs had risen to almost £52.3 million, said that it would focus its attention on Britain and Canada.[14]

Controversy

Purplebricks has faced a variety of criticism since its launch, primarily around the validity of online reviews.

In August 2017, Purplebricks was featured on BBC's Watchdog following an investigation into claims of misleading customers.[15][16][17]

On 14 September 2017, consumer review website Trustpilot issued an open letter clarifying its Purplebricks review policy following allegations concerning the 'validity of reviews of Purplebricks by customers'.[18][19]

In September 2017, the company was accused of 'corporate bullying' following suspension from estate agent review website allAgents.co.uk. Purplebricks threatened the consumer review website with legal action over the publication of negative reviews due to the site's lack of vetting for those leaving reviews.[20][21][22]

In August 2018, the Australian Financial Review (AFR) reported troubling management and lacklustre sales issues.[23][24][25]

In February 2019, Purplebricks' share price dropped sharply after it lowered its US and Australia revenue forecasts.[26]

In May 2019, the AFR reported that "increasingly challenging market conditions" and "execution errors" contributed to Purplebricks closure of Australian operations.[27]

References
  1. "Purplebricks Group plc Final results for the year ended 30 April 2018" (PDF). Purplebricks. Retrieved 5 July 2018.
  2. Evans, Judith (23 March 2017). "Is online estate agent Purplebricks overvalued?". Financial Times. Retrieved 20 September 2018.
  3. "Purplebricks Gets Another £8M To Disrupt Real Estate Agencies In The UK". TechCrunch. 18 August 2014.
  4. Kollewe, Julia (3 December 2015). "Purplebricks float expected to value online estate agent at £240m". www.TheGuardian.com. The Guardian - Guardian News and Media Limited. Retrieved 18 May 2017.
  5. Steafel, Eleanor (3 December 2015). "Purplebricks becomes first online estate agent to list in London". www.Telegraph.co.uk. The Daily Telegraph - Telegraph Media Group Limited. Retrieved 18 May 2017.
  6. "Purplebricks now in profit and gets £1,000 per instruction". www.EstateAgentToday.co.uk. 5 December 2016. Retrieved 18 May 2017.
  7. "Purplebricks, Plc | Investor Relations". www.purplebricksplc.com. Retrieved 29 January 2019.
  8. Sands, Mark (29 August 2016). "Purplebricks heads Down Under with Australian launch". www.cityam.com. Retrieved 29 January 2019.
  9. "Purplebricks launches in the US" (Press release). London: Purplebricks Group PLC. 15 September 2017. Retrieved 21 September 2017.
  10. "Yellow Pages sells ComFree/DuProprio to Purplebricks for $51 million". The Montreal Gazette. 2 July 2018. Retrieved 13 November 2018.
  11. "Purplebricks in European launch as it teams up with Germans". Evening Standard. 15 October 2018. Retrieved 21 February 2020.
  12. "Purplebricks finds German home with Homeday stake purchase". Sky News. Retrieved 21 February 2020.
  13. "Purplebricks to quit Australia". Australian Financial Review. 7 May 2019. Retrieved 8 May 2019.
  14. Clarence-Smith, Louisa. "Purplebricks shuts down cash-hungry American business". ISSN 0140-0460. Retrieved 21 February 2020.
  15. "Purplebricks apologises for repeating banned claims after share price falls 7pc". The Telegraph. Retrieved 8 September 2017.
  16. "Purplebricks shares drop by 6% following BBC investigation - The Negotiator". thenegotiator.co.uk. Retrieved 8 September 2017.
  17. "Purplebricks CEO savaged on BBC's Watchdog - Mortgage Solutions". Mortgage Solutions. 3 August 2017. Retrieved 8 September 2017.
  18. "Open Letter in response to questions regarding Purplebricks and Trustpilot" (Press release). London: Trust Pilot. 14 September 2017. Retrieved 21 September 2017.
  19. "Exclusive: Trustpilot review company explains its Purplebricks policy". Estate Agency Today. 14 September 2017. Retrieved 21 September 2017.
  20. "Purplebricks 'bullied review website' over negative responses". The Times. Retrieved 21 September 2017.
  21. "Website Suspends Purplebricks Reviews Page After Legal Threats". NY Times. Retrieved 21 September 2017.
  22. "Escalating Purplebricks vs allAgents spat goes global". The Negotiator. Retrieved 21 September 2017.
  23. "Inside the Purplebricks sweatshop: former agent accuses it of toxic culture". afr.com. 22 August 2018. Retrieved 18 September 2018.
  24. "Fall-out in Australia reaches UK shores as ex-Purplebricks agent accuses it of failure". propertyindustryeye.com. 28 August 2018. Retrieved 18 September 2018.
  25. "Leaked data from Purplebricks in Oz suggests it was 70% off target in June". thenegotiator.co.uk. Retrieved 18 September 2018.
  26. "Purplebricks shares plummet on lower revenue forecast". 21 February 2019. Retrieved 22 February 2019 – via www.reuters.com.
  27. "Purplebricks to quit Australia". Australian Financial Review. 7 May 2019. Retrieved 8 May 2019.
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