OPINION: Purplebricks is broken – is the fix close to home?

I think it’s now fair to say that Purplebricks is broken. A busted flush.

Russell Quirk

The list of their issues and misjudgements is too long even for a 1,000-word Russell Quirk opinion piece however, in summary, it’s lurched from titan of the property industry here and overseas to nothing more than a comedy of errors. It’s the Kanye of the property sector.

At one time under the Bruce brothers, Purplebricks was the darling of the AIM market with an enterprise value of over £1bn. Its promise of real estate disruption extended from its native Solihull to Australia, Canada, Germany and to the Hollywood Hills of the USA. Investor enthusiasm over its prospect to be the first truly global estate agent added rocket fuel to its stock market valuation.

But today PB has lost 96% of its peak value to stand at a market cap of just £36m and by my reckoning its worth a lot less than that in reality given its huge losses, not just in profit terms but by way of market share too. The decline is palpable. Frankly, it’s true value is probably just a discounted sum for its tech plus the dwindling cash it still has in the bank. It’s a husk of a business.

Some of its woes are not its fault – but many are. The move from pseudo self-employed LPEs to employed was dictated by HMRC. The impending legal action by Contractors for Justice on behalf of 200 claimants is a legacy matter related to that HMRC issue. And it is unfortunate that several years and many, many millions of marketing pounds later, the consumer has decided that fixed-fee online estate agency is stuck at about a 5% market share versus traditional agency dominance. Most cheap-fee competitors have fallen by the wayside now, one just last week and with few left to go.

Not fixing questionable customer service, an absence of proper sales progression, relying on above-the-line marketing for lead generation, removing experienced people and hiring empty suits – these were all mistakes. But installing Vic Darvey as CEO was one of their biggest as was promoting Helena Marston, a Paul Pindar puppet. It’s also a mistake to leave Pindar in situ. Vic and Helena know little about the property industry and were always going to be ill-equipped to steer the business without having a clue about our sector’s nuances, idiosyncrasies nor a knowledge or feel for the people within it and who best to surround themselves with. Importantly, and as I will come to shortly, those from outside of the property industry are far less likely to know when and if to pivot – and indeed to what.

Pindar is tainted as the chairman that has allowed the rot to creep in and to consume the business. Adam Smith, a major investor in PB, has publicly called for Pindar’s resignation and once these fights spill into the gaze of the masses like this there’s generally only one conclusion. Soon Pindar will fall on his sword allowing for a clean skin to lead the rebuilding of an entity that, after all, has left Axel Springer as the largest investor with losses running into hundreds of millions of pounds (they bought in at around £3.30 a share whereas today you can buy Purplebricks shares for less than the price of an onion).

In parallel with the commisertastic nose-dive that has befallen Bricks, its founders Michael and Kenny Bruce suddenly find themselves with some time on their hands. They have voluntarily closed Boomin, their latest venture in property, due to the timing of its need for further growth capital misaligning with the cyclicality of investor appetite for the space. See also Zoopla and Homesearch redundancies and the failures of Made.com and Eve Sleep in recent days.

Kenny (left) and Michael Bruce

So, the following solution is usually something that I would charge a lot of consultancy money for, but my fix is so blindingly obvious to me that, once I reveal it, it’s going to be obvious to you and to the related players too and so let’s just say it…

Michael and Kenny Bruce should buy back Purplebricks.

Saying this is simple and some of you will now be musing ‘Yes, of course! I bet they do’. But it’s not that simple – or rather turning the thing around isn’t.

Buying the shareholding of a publicly traded business involves making an offer to shareholders that is generally over and above the current market cap. So they’d need to pay £45m or so for it. But once it’s a private company again it can be pushed and pulled around without recourse to the markets, investors nor journalists. It can begin to transform behind the scenes and in relative comfort.

Then the business model must be changed – that’s the pivot I mentioned earlier.

Fix the sales progression gap. Fix the patchy customer experience. Invest in people, not just tech. Re-establish a ‘leadership not management’ culture. And improve the unit economics so that the thing is profitable. And the only way to do that is to pivot to a full commission approach. In other words, charge like a traditional agent does. 1% or more of sale price on completion – no sale, no fee. Because that will 3x to 4x revenue per client and is also the way that 95% of UK home-sellers remain happy to pay their fee. It’s always best to push at an open door rather than a locked one.

And when I say invest in people, that means allow the individual agent to earn a larger chunk of that fee too. This in itself will motivate and obligate agents themselves to deliver that better service.

Purplebricks has the brand collateral and the foundations to be a sustainable and profitable business. It just needs the vision and the people to execute on it properly once more.

Who better than the founders, fresh from their learnings at Boomin?

By the way. This is an opinion piece, not a news piece. These are my thoughts and my suggestions only and I have no prior knowledge that this initiative is in the minds of Michael and Kenny. I just think it should be.

Russell Quirk is co-founder of ProperPR, the property specialist PR agency and a regular commentator on property and politics. 


Purplebricks’ problems mount as share price falls 15% in a week



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  1. If Carlsberg made Estate Agents…

    Coming from someone who crashed his own business, how are you remotely qualified to advise or make suggestions to others about anything?

  2. Emerypiper

    The picture of Rishi on your desk and the business advice to the Bruce’s… this is a joke? Right?

  3. Nat Daniels


    Keep the brand, but farm out appraisals to local agents?

  4. Woodentop

    PB is like an empty fuel tank. Every time they fill it up using other peoples money, it runs until its running on fumes. The model was broken from the start as a runner and all the shenanigans within PB is a script from a comedy shop.

  5. Not Surprised

    Is it April 1st?
    Why does anyone have a pic of the PM on their desk, all very odd behaviour, just like this opinion piece.
    Go and have a lie down Russell

  6. Chris Arnold

    What makes Russell imagine that the Bruce Brothers are capable of riding to the rescue?

    Aren’t they the ones’ that implemented the failed overseas strategies, the “above-the-line-advertising” (that they still relied on with Boomin), the fee structure that created chaos, but not profit.

    Admittedly, PB has gone downhill faster than an Olympic Skier, but it’s never wise to look for healing at the feet of those who broke you.

    The problems that PB and others like them have created are simply the consequence of incompetent people trying to scale a business too quickly.  The brand has about as much loyalty as Woolworths and about as much credibility as 99Homes.

  7. That70sGuy

    Someone will buy it just for the brand. Pretty well know across the uk

  8. Monitor de Mierda

    It’s down another 6% today and hasn’t yet found the bottom….. What an attractive opportunity for someone to waste a lot of money on something that is so fundamentally flawed!! Looking forward to see how this plays out .


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