Breaking the story to the industry exclusively late last night, EYE can confirm this morning that 0nline agent easyProperty is buying The Guild of Property Professionals plus Fine & Country in a deal – described as ‘game changing’ – said to be worth £60m.
The story is likely to cause shock-waves as it not known how agents might react.
The deal is officially being described as a merger, or ‘reverse takeover’, rather than a purchase.
The deal is however backed by Toscafund Asset Management, which has already pumped money into easyProperty, which in March posted losses of almost £11m on a turnover of under £1m for the year to the end of last September.
Toscafund poured £14m into easyProperty at the end of 2015, and has now decided on further investment.
The business model of easyProperty is changing, and new management has been brought in from GPEA, parent company of both the Guild and Fine & Country. The easyProperty brand will remain the same, although we understand that the deal means that the franchise agreement originally struck between Robert Ellice and ‘easy’ has had to be renegotiated.
The new model means that easyProperty will evolve from being solely a business to consumer operator, to a provider of services to licensees.
The deal will allow the 5,000 Guild agents plus those in the Fine & Country network across the UK to offer additional fixed-price online sales and lettings packages alongside their traditional commission model.
It means that Fine & Country agent branches will, for example, be able to offer both their own luxury high street brand as well as acquire licences at £500 per month each, to access easyProperty’s fixed-price packages aimed at the volume residential market.
The deal is expected to complete at the end of this month.
The Guild was established 24 years ago. Its highly successful spin-off, Fine & Country, has taken off internationally since its launch in 2002, and now has almost 300 outlets in the UK and elsewhere.
easyProperty was founded by Robert Ellice, and operates using the name under licence from Sir Stelios Haji-Ioannou’s easyGroup. Ellice will now become commercial director.
The newly merged company, known as e-Prop Services plc – very similar to the existing company name registered at Companies House – will be headed by Jon Cooke, who has been appointed CEO.
He describes the merger as a game changer for the estate agency industry: “This deal allows our independent agents to offer more consumer choice with sales and lettings products catering to both the do-it-yourself and the do-it-for-me vendor and landlord preferences.
“We recognise the market requires and demands both online products and traditional methods. What I’d like to stress is this newly merged business is the convergence of traditional estate agency and online.
“Effectively we are providing independent agents the ability to compete with products targeting each consumer demographic.
“At the same time, licensees will have full autonomy and flexibility to not only benefit from upfront revenue streams but take advantage of potential lead-generation into their core brand.
“In the coming months we will be launching the new easyProperty website as well as a new national brand marketing campaign.”
Cooke, who headed up LSLi, the acquisition wing of LSL and was later managing director of Your Move, will retain his executive director positions with the Guild and Fine & Country.
His new role as e-Prop Services Plc CEO carries with it the responsibility of rolling out the new easyProperty platform across the industry.
Malcolm Lindley, Guild founder and Fine & Country co-founder, is appointed chairman of e-Prop Services.
He said: “Certainly the landscape of our industry is changing. Our clients require more choice, more flexibility, different ways of accessing our services, transparency and value.
“The strength of the ‘easy’ brand will provide the platform for us to defensively and aggressively continue to protect our independent agents’ market share.”
During the Guild’s recent Fit For The Future roadshows, more than 80% of attendees expressed an interest in a branded technology platform allowing them to offer a choice of services to their customers.
The Guild says it will be following up with another round of regional meetings in the coming weeks to present the new platform and customer proposition, and the commercial opportunities.
Yesterday evening, Cooke insisted that the deal was a merger, or ‘reverse takeover’, rather than an acquisition of the Fine & Country and Guild businesses.
He said that take-up of the easyProperty licences could be popular where agents in some areas are under pressure from online firms.
Cooke said he expects market share by online agents offering ‘self-service’ to grow to between 23% and 25% of the market.
Asked if the easyProperty brand could topple Purplebricks, he said that he expects there to be two brands in the market – similar to Coca Cola and Pepsi, and to Rightmove and Zoopla.
Cooke also acknowledged that while the industry might see the easyProperty brand as damaged (because of their latest accounts), consumers do not. He did criticise some earlier PR – including the enormously expensive launch party among the ‘dinosaurs’ at a London museum, and the ‘funeral march’ of high street agents in London.
Cooke said: “The reality is that the easy brand has 98% public recognition.”
Cooke would not go into details as to how founders of the Guild and Fine & Country may have benefited from the deal.
EYE broke the news yesterday evening just after 10pm. Within 15 minutes the post had attracted over 1,000 reads. Like EYE, apparently our readers never sleep.. 😉
The newsflash post is HERE along with readers’ early comments.
Will easy and Fine and Country challenge Purplebricks?….err…no.
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Will any of them ever make a profit from property sales? ….err…no.
Any sympathy going for all those naive investors being led up the garden path? …..err…no.
More money than sense.
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It was inevitable that someone would come along and challenge purplebricks, but this model appears to be flawed from the start. Homowners won’t be given choice with this model – they will be steered towards the one High Street Estate Agent who is a member of the Guild. There is a company I’ve come across which I understand is soon to launch which is offering ANY Estate Agency a partnership with them for a monthly subscription. It is called Proptoria.com and appears to be the answer to all of these issues.
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Infamy, infamy, they have all got it in- for-me!
When will any of our so called membership associations actually back the traditional sector rather than try and gain share price value from the ever growing on line ‘commiseration’ bubble at their members expense?
NO GOOD WILL COME FROM THIS.
Guess it beats having to actually sell a property to make tips.
The only good news here is it may shake our prestige leaders at OTM into action?
There is so much they could do if they can be bothered?
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Agree Thomas. The traditional sector has been abused by being ignored. But a portal clone isn’t the answer as portals bring agents together to compete (typically by being cheaper rather than better).
The USA has the opposite where fees generate upwards the more agents collaborate with one another.
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can someone who understands this please explain it to me? As far as I can see the Emporer just managed to swap his new robe for a decent set of Ermin
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It will be interesting to hear what the Fine & Country franchisees really think. Will they really want to pay £500 a month per branch to use another license? Might purple bricks seize the opportunity to give them a licence for much less?
However, this demonstrates the risk of investing in online agencies where there are no barriers to entry. There will always be new competitors because you don’t need staff or premises to launch one, just investors daft enough to part with their cash. This will dilute market share making it harder and harder for that business model to ever deliver a return on investment.
There are more that two soft drink companies so to imagine there will only be two online agents is laughable. Look at the supermarkets and the number of competitors in that sector.
Come on fine and country people, tell us what you think. How hard is it to get out of your franchise to get away from a downmarket online offering that might taint the brand you’ve worked so hard to build up? Does this new deal brash the franchisor’s side of the deal this allowing you to switch brands?
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If it’s like the guild agreement outside of an initial term it’s a simple case of serving a short notice period (cannot remember if that’s 1 or 3 months)
As a guild member I don’t understand how this possibly serves its customers (the member agents) – they tried their own property platform brand last year and take up seemed dismal so I don’t see there is any demand / interest from member agents.
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As a Guild member – we are very disapointed and will be leaving. We had no notification about any of this and goes against everything we are trying to protect. 🙁
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It was inevitable that someone would come along and challenge purplebricks, but this model appears to be flawed from the start. Homowners won’t be given choice with this model – they will be steered towards the one High Street Estate Agent who is a member of the Guild.
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How will agent react?
You want me to pay £500 per branch per month to use a system that has helped its existing users to lose £11million for every £1 million turnover so I can erode my own fee structure to compete with an organisation that’s operated by people who wouldn’t make the interview short list for a weekend negotiator? where do I sign?….. sign to have you certified!
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That wins my Comment of the Year Award. Brilliantly observed Mr May.
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Thank you, I read the original story at 4 am, it done my head in so much I went back to bed just in case it was one of those weird dreams where you think you have woken up and bonkers stuff is happening.
I chuckled myself to sleep thinking just how p155ed off Russell Quirk is going to be with Rob Ellice nicking his idea to flog off the software to agents and then finding a buyer!!!!!
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This appears to be a totally knee jerk plan and full of flaws. Having been part of an Estate Agency that was a member of the guild for many years, I for one feel that they are totally selling their members out and not considering the impact this platform will have on them. I sense a mass walk out of members!!!
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Who will be lead mourner at the next funeral organised by EasyProperty?
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Diane Abbott may well be at a loose end?
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Any Guild members out there care to comment? It would be very interesting to hear your reactions.
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Not Guild but Fine & Country. Already checked the agreement this morning and its 12 months notice.
I have been told that a rebrand is underway though; Fine Country and Ex Council
It has a certain ring to it I suppose.
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12 months – that is insane!!! Wow, they really know how to treat their members!!!! Talk about creating anger and resentment – what a Guild!
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Isn’t it more about making money for themselves rather than treating members fairly?
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we joined the Guild as we liked their objectives, it helped us differentiate ourselves from the competition and they specifically were for high street agents- you cannot join unless you are one. Now where does this leave the Guild principles? How does this help me differentiate my business from purple bricks? How does this help me maintain and increase fees by offering added value? I do not see that it does. I am really concerned this will just drive fees down as clients will expect my normal service for a purple bricks price. I have to ask the Guild some serious questions before I sign up to this of remain a member.
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Not really much info on exactly what is happening, and the mechanics of exactly what is proposed.
We are attending one of the information roadshows to find out more but it’s fair to say we’ve checked our contract, know where we stand and depending on the details leaving is a serious option for us.
They say if you don’t want to participate in the easy venture the guild will run as normal. The way we see it is, if we choose not to participate with whatever their easy proposition is we won’t be members of the guild, essentially helping fund a competitor in easy.
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Just been checking my calendar. Your are all missing something!
The country entered a time portal overnight.
Today is April fools day.
It is important for agents to evolve, but aligning F and C with a budget organisation is madness.
Adapt, be better, provide a credible alternative, don’t just be cheaper!!!!
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But isn’t that the case with Savils and Yopa?
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I am going to work on knocking something up in the garage this afternoon that I can first raise substantial amounts of investor cash for, and then sell at a later date to make myself millions of pounds profit.
It doesn’t have to actually work or make any profit. It seems to me it only needs two USP’s to make me ‘loads of money’….reduced service and cheap.
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…and what happens now if all the Guild members and F&C licensees give notice to terminate their membership? What would ‘easy’ have spent their money on then? Nothing, nada, nought! (Apart from lining Malcolm Lindleys and Bill McClintocks pockets that is!).
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I am a Guild member and have been for 7 months now, I don’t see any sense in this venture, but as a Guild member you do not have to sign up to it and I wont be and will seriously now consider my future membership.
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How turn a prestige brand into a budget / downmarket brand overnight.
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Just watched an article about the new ‘Museum of Failure’.
‘Colgate Beef Lasagne’ was my favourite!
Could this ‘deal of the century’ be a future candidate….perhaps before the end of the year.
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I won’t comment on what is a matter for the licencees, but it seems to me that the big online agents see franchising on the High Street as the way forward.
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This is an absolutely bonkers theory isn’t it – I can’t see any good in this model for the clients of the Guild, or members of the Public – they will not be offered a choice – they will be limited to Guild members (one per postcode areas as I remember).
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This deal is Bonkers!! Throwing good money after bad. So the original model was hugely unsuccessful based on them not garnering anywhere near enough traction with Joe Public…and their answer is to strong-arm Guild members and Fine & Country Franchisees to become customers in the absence of members of the public!? Some people are going to lose a lot of money out of this deal. It most certainly will not be a ‘game changer’ for anyone else in the industry.
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A colleague has just made a great point.
What if Easy Property know, deep down, that their model is flawed?
Rather than face shareholder meltdown, they reverse into a proven model whilst making vague noise relating to greater distribution of the flawed model.
Could Guild and F & C’s profitability therefore be the reason for this deal and will we see Easy Property’s self-service offering decline and disappear once shareholders see revenues starting to come in? If my colleague is correct, the new venture will give the self-service offering as little emphasis as the Guild has given its Property Platform self service offering.
There’s also the point that sales commission is only part of the story these days. Easy Property didn’t attract City money on the strength of cheap property sales fees. Its proposition to potential investors would have been about data driven opportunity. Financial Services, Conveyancing, Media Swap, Energy Swap etc can generate big numbers when there’s big volume.
The Guild and F & C must do 100,000 completions per year. There’s therefore big money potential here but only if their traditional, professional members will embrace this sort of thing. I don’t think they will.
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Good point. I definitely think it’s a move determined by the original model failing, they wouldn’t be doing it if they had absolute confidence in the model. I guess on the face of it it’s an exercise in spreading risk…but the issue for investors is that the price for spreading risk is very high. I imagine EasyProperty will test a new version of their platform, but if it fails they are able to diversify or simply rely on the existing businesses of the Guild and F&C. The problem for Fine and Country franchisees is the impact the experiment has on their brand in the meantime. It’s a massive gamble, and one only likely to benefit a few I feel.
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This is a Heads Gone moment.
i have visions of Ellie and Cooke trying to get a piano across a bridge like Laurel and Hardy
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Is this not our first example of a separately branded Online agent investing BACK into a he High Street to give it a High Street presence?
I used to work with a High Street company that also had a franchise of F & C in the same building. Two separate brands working from one office servicing different segments of the market.
This would now add the online offering dimension So all bases covered from one High Street office under separate brands. That could be a game-changing model.
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Pahahahahahaha
I used to be a member of the guild – they are more interested in THEIR brand than yours. They have given more credence the failing online only/call centre model, which is a slap in the face for their members and proper agents. The guild was speaking of TV adverts not so long ago to combat PB, members MAY have preferred this – after all, they are paying around £400 per month to be associated with the guild and they ain’t getting much bang for their buck ATM.
I’m going to see if I can make a loss in my branches as this seems to be the way to make millions in investments!
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Rob was clever to pull initial funding in. But mid range budget isn’t the best for agents or consumers.
Jon knows his stuff and has a solid track record. So with further funding can build something more traditional bigger.
Purple is a fantastic fund raiser for its VC’s although not a good proposition for best agency or sellers. Especially as most budgets need £500 break even per listing. The problem here is were likely to see a bigger subsidised model come in that will start entry from £150/200 with ongoing vendor costs till sold. Agents won’t be able to be this cheap.
Agents need to upgrade and sell on service which I believe done right could see fees at 2% / 2.5% upwards.
Budget doesn’t work unless subsidised by big backing or other services.
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Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahhahahahahahahhahahahahahahah (gasp to catch breath) hahahahahahahahahahahahahahahahahahahahaha.Does Rolls Royce give away competition flights on EasyJet? Does an Aston Martin give you a PoundStretcher gift card? Errrrrrrr no. So why would any luxury brand want to market an established ‘value’ brand? If you see genune value online why not partner with Hystreet (or similar or start from scratch) and either offer an F&C ‘luxury online offering OR create a ‘luxury online-only’ brand from scratch. Why would you pay £33m for a business that filed similar losses to PB in the last year but for a fraction of the marketshare? Imagine what you could build from scratch with that sort of money? More baffled than ever.
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It’s certainly a strange choice for a budget brand to merge with a luxury brand!
As Kristjan says, if agents are interested in adding an online element, then OneDome can provide that. There’s no need to invest millions developing it from scratch when technology companies such as ourselves have already developed the software for agents. Fine & Country should have considered other options to digitise their agency before spending millions on a brand with huge losses.
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It is well worth reminding yourselves what your new service supplier thinks of you
http://www.propertyindustryeye.com/war-easyproperty-launches-bang-67-listings/
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Yup, that’s a bigger U turn than Bruce Jenner.
and about as appealing.
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Good reminder Robert.
As it is election day thought I would use this analogy;
Is this like the conservative and labour party merging without any consideration of what their members may think?
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To be fair though Robert, Ellice has probably changed his hairstyle since he made those comments.
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March posted losses of almost £11m on a turnover of under £1m for the year to the end of last September.
Toscafund poured £14m into easyProperty at the end of 2015, and has now decided on further investment.
This just about sums up the ability of fund managers playing with other peoples money. Criminal. Soon we will be hearing from the stock market, shares prices rising, valuing the business at £billions. What a farce.
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Toscafund 2016 acounts showed just over £30m turnover, nearly a third in expenses, operarting profit of just under £21m BUT £27,436 loss in investment. Do I see a trend?
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This model seems very restrictive to both the Homeowner and the High Street Agent when what is needed right now is more flexibility. The Homeowner needs to be given more choice when selling their home and the High Street Agent needs to be able to offer that.
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Proptoria Ltd doesn’t seem to have any directors recorded, that isn’t a great start; there should be at least one person named and responsible for the firm.
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They would be surreyenergyassessors76 or Me0737 I suspect, or am I getting too cynical in my old age!
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I guess so too but they need to complete their companies house registration so the industry can see who they are dealing with.
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I am not one of the directors but I do know them and you can find details on LinkedIn https://www.linkedin.com/company-beta/16275364/. Worth checking them out though, the costs are lower and they are looking to help the estate agents challenge in the online market without hurting their own brand.
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Certainly nothing to do with me – I have just been told about it by several agents I do EPC’s for and it sounds like an interesting concept ( I wish it was me!!!)
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In my opinion, I think this move, merger, buy-out (or whatever you wanna call it) is driven by desperation and jealousy, rather than ambition and foresight. The green-eyed monster!
Easy are looking at the seemingly successful ‘purple’ and thinking “wtf are we doing wrong….quick, let’s grab hold of the old codger over there, merge and then ‘sell’ the members the concept of a do-it-yourself online service’. The guild have tried this before.
Hardly the ‘deal of the century’ – that award goes to the bunch who bought the MoD property portfolio.
The phrases and words used in this article must have come from the ‘let’s use as many sales-based phrases and make this sound really important’. makes me want to scrape my eyes out and grind my teeth.
Easyproperty have been around for about 15 years. to invest £14m into a business that turns over £1m after all this time is a little questionable.
Anyway, what do I know. I set up in 2006, turnover £1.5m, was rejected by the guild and told by rightmove that I’d fail unless I subscribed to their service. Told ’em all to foxtrot oscar. Ha!
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I’m very pleased. This is clearly Tosca moving to safeguard their failing investment in the hands of Robert Ellice (who I have good reason to despise – so I’m biased).. but it’s true all the same. Ellice has been under extreme pressure to produce results, especially as he has taken (recouped) from the company every penny he originally put in (and more), whilst shareholders have received absolutely nothing!
The change of management is telling. It speaks an incompetent CEO with as much personal charm as a hungry lizard.. who has now been removed from post – I’m betting that was a strict condition of the deal. ‘Commercial Director’?.. a suitably impressive title to mask an almighty demotion.. probably before a staged departure from the company altogether. Re-negged the ‘Easy’ deal.. yes, taking it away from Ellice.
I’ve nudged and poked at Ellice for a while now and knowing him as I do, he will be gutted to have lost control, especially in circumstances where his own performance has forced the action.
Sorry to be a bitter old man but if Ellice did to anyone else what he tried to do to someone I care about, he wouldn’t illicit any sympathy if he suddenly found himself jobless and homeless to boot.
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