Foxtons shuts six offices as revenues sink ‘in challenging market’

In a trading update, Foxtons has revealed that it has now closed six offices.

They include its flagship branch in Park Lane, plus Barnes, Beckenham, Enfield, Loughton and Ruislip.

It said that it continues to cover 85% of London from 61 branches.

In the third quarter of this year, it said that group revenue was flat year on year at £35.1m, taking total revenue for the nine months ended September 30 to £88.1m, down from £93.7m in the same period last year.

Lettings revenue was slightly up at £23.1m (2017: £22.5m) but sales revenue in the quarter was marginally lower at £9.9m (2017: £10.3m).

Foxtons called this “a solid performance amidst ongoing reduced transaction levels”. Revenues in the mortgage broking business, Alexander Hall, were £2.1m (2017: £2.3m).

CEO Nic Budden said: “This was a solid quarter in a challenging market.

“Whether it’s securing a premium valuation for a house sale or letting a property to a quality tenant, we know our customers value exceptional service that delivers results, and this is how we differentiate ourselves.

“We are managing the business for the current market conditions and remain confident in our long-term prospects.”

Foxtons will issue a post close update in January ahead of full-year results in February.

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17 Comments

  1. Property Poke In The Eye

    Wow!!  They will need to close more in order to survive.

    There will be more other agencies closing by the end of the year.

    Once the tenant fee comes into play it will be game over for even more companies if they don’t focus on service and raising their fees.

    Feel sorry for the negs in many offices around us, as I can see they will not have jobs by the end of the year.

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  2. henrymarr80

    I heard they have stopped doing sales in some offices as well with just token skeleton staffing

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  3. surrey1

    Grim out there, folks. Can only recall one closure locally in ’08, poor chap had only launched year before. Seen a handful in the last two years and just heard of another, some long established. I suspect more of the same to come and the well will run dry for more.

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  4. J1

    A lot of regional high street agents are trundling along with one or two staff per office backed by call centres or call handling firms – not good service; just smoke and mirrors.

    Any agency with high fixed overheads is in big trouble this next six months.

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  5. AgencyInsider

    An example of prudent Management dealing with a challenging set of circumstances. Whilst it may mean regretable pain for a few, I’d bet that the bulk of the Foxtons setup will weather this particular storm.

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    1. Property Poke In The Eye

      They will need to close more offices in order to weather the storm.
       
      They should have stuck to Zones 1 – 3 only. Harrow, Hounslow, Wembley etc are not made for the Foxtons 3% fee structure.
       
      Any multi office operation who close non profit making branches quick are the ones who stand a chance of survival.
       
      The high street is starting to look bleak with other businesses also closing down.
       
      Is the high street still the way forward for estate agency?

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      1. AgencyInsider

        ‘Is the high street still the way forward for estate agency?’
        Yes.

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        1. Property Poke In The Eye

          I also think the High Street is the way forward backed with excellent service.  It would be good to know what others also think.

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          1. NotAdoctor32

            The high street will always be the way to go but it will be with far fewer agents than there are currently.  The ones that succeed and grow are the ones that adapt to buyer’s and seller’s habits and needs.

            As much as a lot of people on here don’t agree, tech will play a big part in it.  The general public will demand it, things like booking tools, instant updates, auto-response.

            Hate PB, Yopa et al as much as you want but PRE-instruction and PRE-viewing they are brilliant.  Obviously, it all goes to pot after the initial contact but that is why the High Street will always succeed.  Service.  The agents that adopt these behaviours and still continue with outstanding service are the ones that survive and thrive.

             

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            1. smile please

              Pre val, pre viewing they are brilliant.
               
              Well only because they spend millions acquiring clients through advertising.
              If I had an uncapped budget I could buy a market. 
              Despite all this they still fail to make profit.
               
              Some tech is good but most is smoke and mirrors. And I still have not had a single client say I wish you were like ‘insert online agent’ 
              However I have had many say you are so much better than ‘insert online agent’ 

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              1. NotAdoctor32

                “Well only because they spend millions acquiring clients through advertising.” – Wrong.

                I’m not even talking about marketing.  It is customer engagement.  They are available when people are looking and booking – in the evenings and weekends.  They get instant communication back with peoples names and faces on.  Instant gratification.

                I’m also not talking about profits – they are terrible POST instruction.  That isn’t in question.

                Of course, you are better than an online agent, that was my point, and you may not have had a single client that says they wish you were like an online agent, but how many have never spoken to you because they wish you were?  I bet there are a few.

                There is a lot of good tech out there (also a lot of solutions to problems that don’t exist!) and those that bury their heads in the sand will struggle while the ones that embrace change and give clients what they want will thrive.

                 

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  6. Bless You

    Amazing times. At £300k a time , some lucky wine bar owner will enjoy taking over a foxtons office.

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    1. Property Poke In The Eye

      What is £300k a time?

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      1. BigRed

        I assume he means the rent per Branch

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        1. Bless You

          nope, average cost of refurb when they took them over.

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  7. smile please

    Foxtons as aggressive as they are, I admire greatly.

    As bad as it sounds closing 6 offices, at least they have acted before it’s too late unlike other companies / industries.

    If they weather the next 18 months they will be fine but thrown into the mix tenant fee bans it’s far from certain.

    Ironically it’s never been a better time for a true independent agent that has a grip on their costs, a lot of opportunity to obtain good instructions with a healthy fee.

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  8. AgentQ73

    Should have crowdfunded it “These branches aren’t losing as much as the online boys so please send cash our way. We guarantee to lose money at a slower rate”

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