Investor urges Foxtons to open branches nationwide

With London’s population set to decline for the first time in more than 30 years, driven by the economic fallout from the coronavirus pandemic and people reassessing where they live during the crisis, Foxtons is being urged by a major investment firm to open branches outside the capital.

Homebuyer trends have changed during the coronavirus pandemic. The sharp rise in home working is encouraging growing numbers of people to consider moving elsewhere, with many reluctant to return to pre-pandemic work conditions.

The accountancy firm PwC recently said that the number of people living in the capital could fall by more than 300,000 this year, from a record level of about 9 million in 2020, to as low as 8.7 million, which would be the first annual drop since 1988, and that partly explains why Investor Catalist Partner wants Foxtons to open new branches across the country.

The investment company, controlled by property industry veterans including Robin Paterson, has a 2.3% stake in Foxtons and is now pushing for changes that it believes could propel Foxtons to a £1bn valuation.

It also wants Foxtons to open a branch in Hong Kong to attract Far Eastern buyers.

Catalist has published a dossier outlining how Foxtons could expand in cities such as Exeter, Norwich and York.

“Longer commutes are tolerated post-pandemic,” said Catalist, which previously called for change at Countrywide before its takeover this year.

Catalist suggests that Foxtons could buy a regional brand or a series of smaller agencies.

The pressure on Foxtons comes after a large proportion of its shareholders failed to back a £389,000 short-term bonus for its chief executive, Nic Budden, while refusing to return close to £7m of furlough money and business rates relief.

 

Foxtons chief executive receives £1m bonus package despite shareholder revolt

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18 Comments

  1. Chris Watkin

    Interestingly, Foxtons have increased their market share by a sixth in the last 2 years
     
    (Market Share 2018  3.921% vs 4.576% in 2020)
     
    Surely it would be easier to grow in London than worry about spreading out to commuter towns?

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  2. Hillofwad71

    Did you know the largest cattle station in Oz alone is larger than the whole of Wales ,the top 5 larger than Ireland  where cattle stand  on brown barren land fed gloop and don’t eat grass . How can our beef farmers who adopt different standards compete with that on price without reducing quality?

    A  digress but Foxtons acquiring  Douglas & Gordon for £14.5m , buying out the long standing  shareholders .
    The CEO Jamie Evans  arrived at D&G in 2015 and a few  difficult  years to steer the ship through so jury out on that  one.

     
    Having spent 14 years at Foxtons rising to Div.Director level ,overlooked  for the hot seat when Budden was promoted  as Foxtons chief Honcho in 2014 which no doubt precipitated his move.

    He must find himself in a weird space to find himself back  again at Foxtons  where his ambitions were thwarted . No  position on the main board  either.

    How can they keep him sweet unless  granted  some major share  options ?.

     Danger he will be off taking away the majority of D&G’s business or is he  a  possible replacement for Budden ?

    Expand by  all means organically stretching out but if they are going to buy in busineses lets not make the mistake of paying out in hard cash but shares giving the business drivers every incentive to remain  on the premises

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    1. whatdoiknow58

      Agree with HOW on his last comment on paying out in cash for any business without a cast iron lock in for the owners/directors upon sale. You only have to look back at the Countrywide ( remember them? ) mass hovering up of a string of Letting businesses with borrowed money only to subsequently find a number of those previous owners setting up around the corner using their sons/daughters/friends etc. as the named owners to get around a very loose and hardly watertight pre-sale contract. To be fair pretty sure Foxtons or indeed Connells are not that daft.

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      1. Hillofwad71

        Yes recipe for disaster CWD borrowing cas h to buy in disappearing revenue .Agreed Foxtons will be much more circumspect 

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    2. undercover agent

      I come from a family of UK farmers and we are not worried about Australian beef.

      People who are, either don’t have faith in UK farmers ability to innovate and produce better quality products,

      or they just want to reduce consumer choice so that some of the more lazy UK farmers don’t have to improve. It’s a conspiracy against the people, making normal members of the public worse off just so that some lazy farmers can keep on being lazy instead of selling up to more dynamic farmers who will produce something good that benefits everyone.

      My advice to anyone wishing to reduce competition and consumer choice under the bogus name of “protecting farmers” is to have more faith in UK farmers and welcome cheaper food prices, more choice and the new innovative foods that farmers will be able to produce in the UK.

      Making the poorest in society pay higher prices for steak in a misguided attempt to protect your view of the countryside, is in my opinion shameful.

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      1. Hillofwad71

        Fair point undercover but surely with those huge economies of scale ,a dubious track  record of animal welfare, dehorning cattle without pain  desensitivisation, feed quality, growth hormone treatments  and a pesticide list a banned in the UK  its not a level playing  field for the intensive farmer in the UK.  
         
          Sure necessity is the mother of invention and innovation to change but…       “Making the poorest in society pay higher prices for steak in a misguided attempt to protect your view of the countryside, is in my opinion shameful.”  
         
          However the outcome of the Oz deal will be to drive prices down. So how can UK farmers compete  with that without reducing quality  when Oz hold all the advantages .   All that is going to happen is  the poorest members of society are going to eat substandard meat
         
        A bit like Purplebricks with a race  to the bottom on fees -the service suffers

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        1. undercover agent

          Hi, I’m not sure it’s fair to say that Australian beef is “substandard” that seems a bit harsh.

           

          I’m sure we agree that it’s safe and that if anyone wants to eat it they should be free to do so. We all make personal decisions about what we put in our bodies (cheap beer etc) and not withstanding some basic safety safeguards, I think it should remain the choice of the individual.

          This isn’t about “consumer protection” as consumers are ultimately best protected by being given greater choice.

          if you personally don’t like Oz beef, you don’t have to eat it. You can stick to your usual Japanese Kobe beef, but please let others be free to make their own decisions.

          Thinking UK farmers can’t compete against economies of scale, just shows a lack of confidence and a lack of imagination. People have no idea what wonderful and delicious things we can produce if we can just had the opportunity. But right now Beef makes sense to produce, so other ideas are shelved for later.

          let the Ozzy beef in, and watch this space for some exciting and wonderful innovations that will tickle your tastebuds.

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          1. Hillofwad71

            Herein lies the rub .  
            Unfortunately personal  choice for many is dictated by price who  don’t enjoy the luxury of researching labels for source of  product .
             
            Hobson’s choice.
             
            The product  will also find its way into other foodstuffs, restaurants  and takeaways  so they eat  it by default .Naive to think otherwise .
             
              “This isn’t about “consumer protection” as consumers are ultimately best protected by being given greater choice.”
             
            Its also about  raised awareness too .
             
              Consumer protection is safguarded by having  food standards , animal welfare ,environmental and sustainable protections  and banning certain pesticides .
             
            They are there for a reason and most UK  farmers  accept this However it comes with a cost  which has  to be borne.
             
            In the UK  pretty much all beef cows graze grass in the summer and are fed hay, silage or straw in winter No way the UK  public would accept cattle standing  on barren land and fed gloop all the year around which reduces  costs like OZ
             
              Those standards  are completely diffferent in Australia .
            Not harsh but factual  
            “Thinking UK farmers can’t compete against economies of scale, just shows a lack of confidence and a lack of imagination”
             
            The average size beef farm  in the UK  is 130 acres. In Austalia it  is 10,700 acres Those economies of scale are factual not imaginary 
             
            ” Russ Carrington, of the Pasture Fed Livestock Association, said: “It is sad that the travel towards cheap, de-valued food has led to the removal of livestock from fields. There is a very different, more sustainable way of producing high quality beef which is also considerably healthier for humans to eat – 100% grass-fed and grain-free, which has lower total and saturated fat content, a better ratio of omega 3 to omega 6 fatty acids and more vitamins and minerals, which comes from the diverse pasture they eat.”
             
              This is only  a taster to opening the door to  chlorinated  chicken from  the USA .It’s only a hop step and a jump away    

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            1. undercover agent

              We have chlorinated salad in the UK, so I’m sure you’re not averse to using chlorine to clean your food. Claiming that you want to reduce consumer choice in the name of protecting animal welfare misunderstands how the food industry operates. Farmers love their livestock and take caring for them very seriously and personally.

              It’s very often not a “race to the bottom” which is why we don’t all drive those old cheap Skodas. In fact, even Skoda has realised that to compete, they need to improve quality, because consumers don’t always choose on price alone.

              In farming, it’s not as simple as Big=Best. Just because Australian farmers are bigger does not mean they will be better. Good British farmers have nothing to fear, just like how good agents haven’t lost out to PurpleBricks. Less good agents have struggled to compete against PB, but that’s not a reason to ban PB from the country.

              Maybe people will agree with you and pay more for Kobe Beef, why not? More money for higher quality is not a problem. However, reducing the choices of poorer people because you feel they make the “wrong choice” and should not be allowed to choose to buy Skodas because you wouldn’t be seen driving one, is just harming the people you claim to be trying to help by taking away their options. while helping the worst, most lazy section of British farmers, those too old and lazy to increase the quality of their produce.

              If you care about animal welfare, Look at Japan and how they care for their cows after they had to compete with imports. Sleeping on mattresses and enjoying a daily massage. Those cows have it good.

              Don’t fear change, innovate and make the change you want to see. Let people freely decide if you have a better widget, and if you have, then well done, the world is yours. Forcing people to buy your old “substandard” widget by nobbling your competition is not sporting behaviour. Give people choice and let the people decide for themselves. No one is forcing you to buy Australian beef or making you eat in restaurants that serve it. The great British people should decide how they want to spend their money. Be brave enough to let them. I’m sure lots will agree with you.

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              1. Hillofwad71

                Exactly
                 
                “In farming, it’s not as simple as Big=Best. Just because Australian farmers are bigger does not mean they will be better. ”
                 
                That’s the point  I am making Not only that they operate under different standards ,the value of their land which the catltle lies is low which also  means their cost of production are  far cheaper  than the UK
                 
                  The UK intensive farmer who relies on the volume market can not compete   on price with all these  hardwired cost advantages .  The goalposts are being moved with cattle stations the size of countries 
                 
                  “Forcing people to buy your old “substandard” widget by nobbling your competition is not sporting behaviour. Give people choice and let the people decide for themselves. No one is forcing you to buy Australian beef ”
                 
                Well that one really takes  the biscuit.  What you are saying is  that allowing growth hormones   feeding cattle gloop  all the year around and using a whole  list of banned pesticides is entirely  acceptable and unsporting to draw attention to it .Even though not allowed in the UK
                That is a total anithesis to what  you open with
                 
                ” Farmers love their livestock and take caring for them very seriously and personally.”
                 
                  In addition  failing to acknowledge that those who can at least afford it  who need our protection have very little choice  in the matter  Forced to buy the cheapest cut available
                 
                How on earth are people who eat in restaurants  will know the product comes from Australia unless they specifically ask or the restaurant draws attention to it  or its mixed into other foodstuffs 
                 

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  3. Property Poke In The Eye

    Yeah… they should open up in Bradford.  The brand will be welcomed there.

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  4. smile please

    Foxtons strength is they have concentrated in prime, high turnover areas with a fantastic recruitment and management ethic.

    You move this to a new city or town the offering is watered down.

    It would be commercial suicide to go nationwide.

    They just won’t be able to have the ethos across the country.

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    1. Robert_May

      Foxtons works where Foxtons works, where the Foxtons style beats to  the same rhythm as their clients and applicants.
      The story isn’t saying Foxtons – Foxtons would work in Norwich, Exeter or York but seems to be saying the group should do what it does best but in the style appropriate to Norwich, Exeter or york.
      In the same way Douglas and Gordon  was a good starter for widening the register base there are several small chain regional agencies who  could probably have a meaningful conversation with them.

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      1. smile please

        Foxtons works because they have a strong brand and USP

        You know Exeter well, would a Foxtons style work there? No.

        Foxtons are too aggressive and will be too hard to get a foothold in the market. The largest independent there is Bradleys, if they were to buy them could you honestly see Foxtons blueprint working and rolling that out to their lovely but provincial staff?

        So start up is a no, buying a firm is a no …. Stick to do what they do best. Organically grow from current area.

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        1. Robert_May

          Bradleys owned by Foxtons but continuing to be Bradleys would work in the same way Independent agents all over the country  became Countrywide but retained their local profile.

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          1. Malcolm Egerton

            And that worked so well for them – stripping out all the great management – not!
            There is immense loyalty to both the big boys (Savills, KF and S&P) and the embedded local agents (Fulfords, Bradleys and Wilkinson Grant) that the Foxtons model would find hard to undermine.

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          2. smile please

            Thats the issue Robert, they will not retain local profile same way CW purchases fell off a cliff as the ethos of the company changes.

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  5. Malcolm Egerton

    There’s a reason Foxtons business model works well in London: a fluid population and lack of community. So ‘there’s another one along every minute’ operates; just as soon as people rumble Foxtons they leave London to be replaced by ‘fresh meat’.

    Not sure this will work well where the population is more static.

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