New interim CEO announced for Purplebricks in US as business in turmoil

A former vice-president of sales at Foxtons has been appointed interim CEO for Purplebricks’ US business.

How long Phil Felice’s tenure could last is a matter of conjecture but it could be only a matter of weeks, with an update on Purplebricks’ American business expected in early July.

Amid considerable turmoil, he takes over from Purplebricks co-founder Michael Bruce, who was ousted from the global business earlier this month at the same time that it was announced the Australian business would close.

Bruce had stepped in – briefly as it turned out – to oversee Purplebricks in the US after the departure of Eric Eckardt in February.

Felice will now play “a pivotal role in determining the group’s options for delivering the next phase of growth in the US”, Purplebricks told the stock market yesterday.

The US business is undergoing a strategic review, while Purplebricks in Australia is tidying up loose ends after shutting to new business.

Felice was previously vice-president of sales at Foxtons in New York for five years, between 2003 and 2008.

He joined Purplebricks in 2017 in the same role.

Before then, he spent two years as head of sales at Hubzu, an online auctions business, and has also been a vice-president at Realogy.

Foxtons’ foray into the North American market in 2000 proved ill-fated. Based on under-cutting the opposition by charging around 3% commission as opposed to the normal 6%, it filed for bankruptcy in 2007.

Vic Darvey, group chief executive officer at Purplebricks, said yesterday: “We are currently assessing a number of different scenarios around how we operate in the US but remain optimistic about the opportunity for Purplebricks here.

“Phil will be fundamental in helping us develop a more sustainable business model, based on a tested and cost-efficient strategy.”

Felice said: “Purplebricks has made positive headway with our brand awareness and engagement in the US to date.

“Over the coming months, I look forward to working closely with Vic and the leadership team as we develop our strategy for the US business and show our customers a more convenient, transparent and cost-effective way of buying and selling their homes.”

Purplebricks said it will provide a further update on the progress of its US strategic review at its full year results on July 3.

Yesterday the share price closed down almost 3% at 101p.

x

Email the story to a friend

37 Comments

  1. Hillofwad71

    This article appeared in The Geelong Advertiser outling the reasons why they failed in Oz.Rinse and repeat in USA

    https://www.geelongadvertiser.com.au/business/purplebricks-was-destined-to-fail-in-australia/news-story/ee2bdcf235963ab21d3f8305b189b05e

    “Purplebricks, according to Mr Rigby, failed to make the most of digital marketing, instead opting for expensive TV ads that came with a lot of “wastage”.

    To make matters worse, Purplebricks was “overpromising and underdelivering” on the actual experience.

    Mr Rigby, who launched Upside Realty in August 2017, said he heard about problems with Purplebricks “from very early on”. “We had a couple of people join us from Purplebricks early who believed in the model but were frustrated with the execution,” he said.

    High level departures already taking place in USA .Should think at best it will be scaling back in July l Felice will be known as the man who put Interim into Interim CEO

     

     

    Report
  2. Moveaside01

    Put who you like in charge but let’s be honest!

    That ship has sailed in the US market………

    Report
    1. WiltsAgent

      I think it has sunk rather than sailed!

      Report
  3. JustPlainSavage04

    Just a complete mess isn’t it.

    Record number for newly appointed CEOs in a year.

    congrats

    Report
  4. cyberduck46

    The fact they haven’t just withdrawn like they have in Oz suggests there is something. Axel Springer investing to accelerate growth suggested there was something.

     

    Mr & Mrs. Jennings’ performance of 115 sales and 10 active listings in the 12 months (approx) from 16/3/18 also suggest there is something.

     

    https://www.zillow.com/profile/John-Jennings-III/

    https://www.zillow.com/profile/Valary-Jennings/

     

    The question is whether that something is enough.

     

    Very few of the other LPEs performed as well as this although whether you update your Zillow figures seems to be optional.

     

    Diane Caddy had 39 sales and 7 active listings. Jessica Brown 39 & 6. JP Dauber 50 &1. Roxanne White 48 & 9. Not many others come close.

     

     

     

    Report
    1. Moveaside01

      Cyberduck, do you really believe Axel Springer are going to invest yet more money into PB having already royally done their B……cks and literally lost tens of millions of pounds?
      They bought £125 million pounds worth of PB shares at £3.07 a share, what are they worth now, about £1.00 a share?
      By my maths that’s the best part of a £45 million pound loss? Would you really want to chuck another ‘wedge’ at it……… 

      Report
      1. cyber_truth

        Cyberduck is delusional and the business is dead. LPE count well below 50% in the US and Florida has less than 5 LPEs, down 75% according to public records. California down 50% and volume is anemic at best. Most US employees have alreay exited.  Axel Springer took a BIG LOSS betting on the Bruce brothers who took millions off the table selling them their shares at the time they made their investment. 

        Report
    2. GPL

       

      Cyberduck…

      Mr & Mrs Jennings seem, from their figures, to be capable of polishing the Purplebricks **** ……no doubt they will continue to thrive when that PB **** dissolves.

      So, much more about their abilities, ….and much, much less about PB, who are merely a gateway for The Jennings.

      * Fact – over 95% of UK Homesellers use High Street/Local Estate Agents.

       

      Report
  5. Woodentop

    Averaging less than 2 listings a week, isn’t exactly setting the world alight with the future is tech and certainly not requiring working 70 plus hours a week. Either the LPE’s are treading water or as suspected just like everywhere else in the world … the consumer doesn’t like them.

    Report
    1. AgentQ73

      It suggests to me they are trying to sell it/give it away to avoid the costs in wrapping it up and try to salvage some credibility.

      Report
  6. Hillofwad71

    Share price now trading below  100p

     

    they go up tiddly up up,they go down tiddly down down.

     
    97.70 GBX −3.30 (3.27%)
    21 May, 09:19 BST · Disclaimer

    Report
  7. Property Ear

    Share price falls below £1 to 98.03p – Commisery and cake all over Purple faces! Serves them right for being so damn cocky.

    Report
  8. Ric

    0.95p

    Report
  9. Ric

    0.91

    Report
  10. PeeBee

    88.5p.

    Event horizon crossed?

    Report
    1. Ric

      ****** 0.96p again LOL…
      Seriously, nuts the LSE…
      Some serious cash to be made if you have the capital to buy big and hold your nerve for the day!
      Some serious cash to be lost aswell… I am sure.

      Report
    2. WiltsAgent

      I imagine Michael Bruce is a motivated seller.

      Report
  11. cyber_truth

    Look around, no one is left in the building. “Hey, you over there, do you want to be interim CEO?”  Purplebricks will exit the US within months, if not weeks unless they just keep California active as they wind down all of US operations. There are daily resignations and most of the US team has already exited this year. LPE count down 50%+ just in the past few months and we see Purplebricks dropping well below 0.80p. The infamous Bruce brothers already sold some of their shares to their blind uncle in Germany, Axel Springer. 

    Report
  12. Hillofwad71

    The question is how much of Axel’s money will Bricks have left if they close USA? The cash burn since Oct has been  huge

    They had £103m cash in October  and earlier this month they had  £62m  in the Tommy  certainly chewed through some of that and say £20m for extra closure  costs in Oz and USA

    Add back in say £10m for sale of Canada at a loss they might stil come out with £35m+???

    UK is self-propelling so that puts them in a relatively strong position financially to face the future

     

    Poor old Axel no wonder they want to apply the brakes

    Report
  13. watchdog13

    How can this business still have a market cap of a quarter of a billion pounds??????

    Report
    1. cyber_truth

      Its not worth this valuation and the stock will drop another 50%+ easily before filing for bankruptcy. Once Woodford sells his 28.72% holdings in his fund, it will sink further and Paul Pindar will not be able to convince him to hold on any longer.  This will be the Bruce brother’s third business that goes into administration, according to the Financial Times.

      Report
      1. Hillofwad71

        Cyber_truth

         

        Extremely unlikley to  hit bankruptcy as  even if they pull the plug tomorrow in USA they are still holding tens of millions of cash

        Axel ain’t going to allow that to happen if they can take outright control for a few dollars more

        Certainly regime change and you can’t discount the possibility of Michael Bruce coming back in if it plummets  a further  50%

        Now a UK recognised brand (it’s cost enough !) .some decent management  in UK and some culture change somebody can pick this up and make a half decent fist of it

        Report
        1. cyber_truth

          Michael Bruce is the reason why the company is in the position its in. He was in overhead and lost the team.  You are foolish to think they’d pool him back in and do agree, someone could buy the UK business if they believed there was value. But once they start due diligence, will run the other way when they realize there is no valuable assets. Tech is garbage (monolithic code base), talent already exited, and there is no business today. Axel will just have to use this against their portfolio average as a write-off. Bruce brother done real good with the Germans!$$$$

          Report
          1. Hillofwad71

            I don’t think he will be pooled back in but with his shareholding can certainly influence how this game is ultimately played out

            The handcuffs of share dealing were take off last month 12 months after Axel arrived on the scene. Perhaps he has recognised himself that he is not the man for managing  the company Certainly been overpopulated with mates of the Bruces

            He is  someone though who can cut a deal, Lets be fair his deal with Axel he certainly came out of that the right side Certainly sold the dream

            The valuable assets are the cash, no debt and the brand It might be sub standard but  its all relative Ripe for someone to pick it up dust it down and start the merry dance again

            Report
    2. Property Pundit

      How can the kid behind Doorsteps be worth £18m according to The Sunday Times Young Rich List?

      Report
  14. J1

    Doomed, all doomed

    I can hear the famous Infamy sketch from Montey Python

     

     

     

    Report
    1. whatdoiknow58

      Agree with your sentiment but ‘ the famous Infamy sketch’ was from Carry on Cleo and the line was delivered by Kenneth Williams as Julius Caesar and I quote ‘ infamy infamy they’ve all got it infamy ‘. LoL.

      Report
  15. Woodentop

    Back to 90p again, that was supposedly the tipping point? UK housing market declining as each week goes by. Oh dear not able to self fiancé when the market was much stronger …. the end is nigh. They are burning up money like it is going out of fashion and with no light at the end of the tunnel…… its a dead end.

     

    I’d love to be a fly on the wall at Axel Springer’s (its a company, not a person) when the person who suggested the investment now has to explain themselves as to why they put in roughly 50% of an annual income into PB and a third has been wiped off with no sign of a recovery. Better to get back what they can and use the loss against another arm that is making money before they loose it all.

     

    Will this spell the end of all on-line pay up front cheap models …… bragging commissary is likely to be the end for schemers, the public never bought into it.

    Report
    1. Woodentop

      At close it lost 13p today ending 91p (thats a big drop). Will it go under 90p to 80p as recommended by Berenberg?

      Report
  16. rsvstu97

    “PB will end up with cake on its face.” Love it.

    Report
  17. Property Pundit

    No sign of the ‘Prophet’ today? Maybe now more like the ‘Prophet of Doom’.

    Report
    1. Woodentop

      Duck season continues.

      Report
    2. Sdaltaf101

      24hrs later and they are 5.2% up on the day.

       

      The share price will remain volatile until 03rd July when the US strategy is published, its likely they could go as low as £0.80 before flying north.

       

      Great business model with huge growth potential.

       

      We will see who has the last laugh

       

      Report
  18. htsnom79

    The English language is a flexible and beautiful thing, however the Germans got it right with a word we don’t have, schadenfreude

    Report
    1. Robert May

      Try ‘comeuppance’; as an industry service supplier Axel Springer apparently cast an envious gaze on agents’ commission. With  about 37.72m shares that have  now lost about £100m in a year, it isn’t pleasure at another’s misfortune but a thoroughly deserved self inflicted seeing to.

      Report
      1. htsnom79

        And they could of got away with it if it wasn’t for those pesky ( inept ) kids, with the money and momentum they had it was doable IF they did the job well as best in class or near as damn it, as was they treated the client as see you next Tuesdays.

        Report
        1. Robert May

           a lesson for all service suppliers with ambitions to eat their client’s dinner!

          Report
X

You must be logged in to report this comment!

Leave a reply

Thank you for signing up to our newsletter, we have sent you an email asking you to confirm your subscription. Additionally if you would like to create a free EYE account which allows you to comment on news stories and manage your email subscriptions please enter a password below.