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User:RT at Purplebricks/Purplebricks History

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History

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Early history

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Michael and Kenny Bruce conceived their idea for an online estate agency in 2012.[1][2] Property sales in the United Kingdom had historically been handled by traditional (or "high street") estate agencies.[3] The brothers previously led one such agency, Burchell Edwards, and believed that a lower-cost, digital model for residential property sales could be developed that reduced expenses associated with running a chain of physical offices.[2][4] The name “Purplebricks” was chosen for this venture while brainstorming around a kitchen table.[5] The founders felt that the colour purple symbolised "regalness" while "bricks" reflected property and technology, and that “Purplebricks” would be a recognisable brand name.[5][6]

The corporate parent of Purplebricks was initially registered in April 2012 with the name New Portal Limited. In October 2012, the name was changed to New Broom Limited, signalling a desire to sweep clean the existing UK residential property market and bring about a fresh approach.[7][1] Early investors included DN Capital, the London-based technology fund, Paul Pindar, the former CEO of Capita, Martin Bolland, Capita's then non-executive chairman, and Errol Damelin, the founder of Wonga.[8][9]

In April 2014, Purplebricks publicly launched and began listing homes in the United Kingdom, although initially only within parts of southern England.[3] In August, the company raised £8m of equity investment led by fund manager Neil Woodford, who acquired a 30 percent stake in the company.[10][11] By May 2015, operations expanded into other regions of England and Wales, and plans were announced for a possible stock market listing.[12] The company appointed Canaccord Genuity to oversee the potential float.[13] Expansion into Northern Ireland and Scotland followed in June and November, respectively.[14][15]

Becoming public

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In December 2015, Purplebricks formally announced its plan to launch on AIM later that month, making it the first online estate agency to debut on the stock market.[16][17] Ahead of the float, the company stated that it had 4,300 residential properties listed for sale—nearly twice the number of the next largest online agency—and intended to use raised funds to further boost its national presence, acquire more agents, and invest in the brand and technology.[18][16] The company also announced it had already sold £58 million worth of shares, primarily to three major corporate investors: Old Mutual, Artemis, and Fidelity.[19] As part of the IPO process, the corporate parent of Purplebricks, New Broom Limited, re-registered as a public limited company with the name Purplebricks Groups Limited.[8] Shares began trading on 17 December.[19] Just under a quarter of the company sold to investors, valuing the online estate agent at £240.2 million.[19]

Further growth and international expansion

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In June 2016, Purplebricks announced that it had recruited an Australian management team and planned to launch its platform in the country.[20] In August, Purplebricks launched a media campaign in Australia about the company's fixed-price property marketing, and formally launched its operations there later that month.[21][22][23] In 2017, Purplebricks’ Australian subsidiary generated a £6.1 million loss with £3.9 million spent on administration costs and £3.8 million spent on marketing and PR-related costs.[24]

Purplebricks expanded into the United States in 2017, beginning operations in Los Angeles before moving into San Diego, Sacramento, Fresno, and then New York in 2018.[25][26] The expansion was supported by more than $60 million in funds raised through a special stock offering.[27] Purplebricks' business proposition remained essentially the same for U.S. customers: the company charged a listing fee of $3,200, which sellers were required to pay regardless of whether their home sold.[27]

In August 2017, Purplebricks was featured on BBC's Watchdog following an investigation into claims of misleading customers.[28][29][30] In September 2017, consumer review website Trustpilot issued an open letter clarifying its Purplebricks review policy following allegations concerning the “validity of reviews of Purplebricks by customers”.[31][32] That same month, the company was accused of “corporate bullying” following suspension from estate agent review website allAgents.co.uk. Purplebricks threatened the consumer review website with legal action over the publication of negative reviews due to the site's lack of vetting for those leaving reviews.[33][34][35]

In July 2018, Purplebricks expanded their operations into Canada through the $38 million acquisition of DPCF, a Canadian real estate company that also positioned itself as "commission-free". [36][37] The acquisition announcement noted that DPCF would continue to be led by the existing management team.[37][38]

In October 2018, Purplebricks announced it would be entering the European market through a joint venture with digital publisher Axel Springer SE. The two companies would jointly purchases a 25.9% stake in Homeday, a German online estate agent.[39] Like Purplebricks, Homeday markets itself by highlighting its lower selling fees compared to traditional agents.[40]

Forbes magazine reported in January 2020 that an email was sent from Purplebricks Canada's marketing department to all employees asking for positive reviews from friends and family regardless of whether they had had any business dealings with the company. In exchange it was reported that the employee that facilitated the most reviews would receive a paid day off.[41]

In June 2020, Purplebricks, Axel Springer, and venture capital firm Project A made further investments in Homeday to help the company expand its operations.[40][42]

International financial losses

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In August 2018, the Australian Financial Review (AFR) reported troubling management and lacklustre sales issues.[43][44][45] In February 2019, Purplebricks' share price dropped sharply after it lowered its US and Australia revenue forecasts.[46] In May 2019, Purplebricks vowed to shut down operations in Australia due to lack of profitability, after reporting an $18m interim loss for the six months to October.[47] This came days after the company's then CEO, Michael Bruce was laid off after disagreements with Paul Pindar over the failed overseas expansion.[48] The AFR reported that "increasingly challenging market conditions" and "execution errors" contributed to Purplebricks closure of Australian operations.[49]

In July 2019, new CEO Vic Darvey announced that Purplebricks would be shutting down operations in the United States, announcing that operating costs had risen to almost £52.3 million, said that it would focus its attention on Britain and Canada.[48]

On July 15, 2020 Desjardins Group announced that they were purchasing the Canadian business of Purplebricks Group PLC for US$60.5 million.[50] It was reported that in the first year of operation, Purplebricks Canada ran an operating loss of US$4.8m. According to BNN Bloomberg at the time of the acquisition, Purplebricks Canada and DuProprio had "more than 500 employees in Quebec, Ontario, Manitoba and Alberta".[51] Desjardins was permitted to use the Purplebricks brand and logos until December 2020.[52]

In August 2021, Purplebricks announced its strategic focus was now "fully on the UK", where it planned to accelerate its model, extend its market share, and continue to grow revenue.[53][54]

References

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  1. ^ a b Lemen-Hogarth, Jen (14 September 2017). "Purplebricks: Hybrid estate agency's lessons from the UK". Real Estate Business. Australia. Retrieved 6 May 2021. Cite error: The named reference "Lemen-Hogarth" was defined multiple times with different content (see the help page).
  2. ^ a b Renshaw, Rosalind (19 March 2014). "Former Burchell Edward brothers return to estate agency". Property Industry Eye. Retrieved 6 May 2021.
  3. ^ a b Allen, Kate (22 August 2014). "Property portals hand control to homeowners". Financial Times. Retrieved 28 April 2021.
  4. ^ Baum, Andrew (April 2017). "PropTech 3.0: the future of real estate" (PDF). University of Oxford Research.
  5. ^ a b Norwood, Graham (10 August 2018). "Purplebricks' founders came up with the name around a kitchen table". Real Estate Today. Retrieved 15 April 2021.
  6. ^ "Michael Bruce: The entrepreneur behind Purplebricks who's shaking the foundations of estate agency". Evening Standard. 30 June 2017. Retrieved 5 May 2021.
  7. ^ "PURPLEBRICKS GROUP PLC". Companies House. Retrieved 28 April 2021.
  8. ^ a b "DN Capital leads investment in Purplebricks alongside former Capita boss". Private Equity Wire. 18 March 2014. Retrieved 28 April 2021.
  9. ^ Pescod, Adam (2 June 2014). "Online estate agency purplebricks.com is shaking up the housing market". Elite Business. UK. Retrieved 30 April 2021.
  10. ^ Rafiq Omar, Rayhan (21 August 2014). "Purplebricks raises £8m to disrupt high street estate agents". UKTN. Retrieved 30 April 2021.
  11. ^ Renshaw, Rosalind (4 December 2015). "Purplebricks says 'not possible' to run online agent alongside high street model". Property Industry Eye. Retrieved 30 April 2021.
  12. ^ "Factbox - UK real estate agents planning IPOs". Reuters. 28 May 2015. Retrieved 30 April 2021.
  13. ^ Lynch, Russell (24 March 2015). "Purplebricks to put its own house up for sale". The Independent. UK. Retrieved 30 April 2021.
  14. ^ Stinson, Jamie (1 June 2015). "Northern Ireland online estate agents return home with 'cheaper alternative'". Belfast Telegraph. UK. Retrieved 30 April 2021.
  15. ^ Norwood, Graham (24 November 2015). "Purplebricks launches in another region as stock market float nears". Estate Agent Today. UK. Retrieved 30 April 2021.
  16. ^ a b Kollewe, Julia (3 December 2015). "Purplebricks float expected to value online estate agent at £240m". The Guardian. Retrieved 15 April 2021.
  17. ^ Steafel, Eleanor (3 December 2015). "Purplebricks Becomes First Online Estate Agent To List In London". The Telegraph. UK. Retrieved 30 April 2021.
  18. ^ Evans, Judith (3 December 2015). "Woodford-backed Purplebricks heads for Aim IPO". Financial Times. UK. Retrieved 30 April 2021.
  19. ^ a b c Curwen, Edward (17 December 2015). "Purplebricks valued at £240 million for IPO". The Times. UK. Retrieved 30 April 2021.
  20. ^ "Online estate agent Purplebricks sees UK profit, eyes Australia market". Reuters. 16 June 2016. Retrieved 3 May 2021.
  21. ^ "UK Real Estate Agency Disruptor Purplebricks Appoints VCCP Sydney for Australian Launch". Little Black Book. 14 June 2016. Retrieved 3 May 2021.
  22. ^ "VCCP Sydney Launches Purplebricks Into Australia To Disrupt The Real Estate Sector". Reuters. 30 August 2016. Retrieved 3 May 2021.
  23. ^ Stiles, Jackson (5 September 2016). ""Super profits" of real estate agents back in the spotlight". SmartCompany. Australia. Retrieved 3 May 2021.
  24. ^ Schlesinger, Larry (June 29, 2017). "Australian expansion keeps Purplebricks in the red". Financial Review. Australia. Retrieved 3 May 2021.
  25. ^ Olick, Diana (15 September 2017). "No more 6% commission – these brokers will sell your house for a flat fee". CNBC. United States. Retrieved 3 May 2021.
  26. ^ "UK's Purplebricks to enter New York in wider U.S. real estate push". Reuters. United States. 23 January 2018. Retrieved 3 May 2021.
  27. ^ a b Wiggin, Teke (September 14, 2017). "Purplebricks is here: UK low-fee brokerage invades LA". Inman. Retrieved 3 May 2021.
  28. ^ "Purplebricks apologises for repeating banned claims after share price falls 7pc". The Telegraph. Retrieved 2017-09-08.
  29. ^ "Purplebricks shares drop by 6% following BBC investigation - The Negotiator". thenegotiator.co.uk. Retrieved 2017-09-08.
  30. ^ "Purplebricks CEO savaged on BBC's Watchdog - Mortgage Solutions". Mortgage Solutions. 2017-08-03. Retrieved 2017-09-08.
  31. ^ "Open Letter in response to questions regarding Purplebricks and Trustpilot" (Press release). London: Trust Pilot. 2017-09-14. Retrieved 2017-09-21.
  32. ^ "Exclusive: Trustpilot review company explains its Purplebricks policy". Estate Agency Today. 2017-09-14. Retrieved 2017-09-21.
  33. ^ "Purplebricks 'bullied review website' over negative responses". The Times. Retrieved 2017-09-21.
  34. ^ "Website Suspends Purplebricks Reviews Page After Legal Threats". NY Times. Retrieved 2017-09-21.
  35. ^ "Escalating Purplebricks vs allAgents spat goes global". The Negotiator. Retrieved 2017-09-21.
  36. ^ Hinchliffe, Emma (2 July 2018). "Purplebricks expands into Canada through acquisition". Inman. Retrieved 4 May 2021.
  37. ^ a b "Purplebricks purchases DuProprio/ComFree". REM (Real Estate Magazine). 9 July 2018. Retrieved 4 May 2021.
  38. ^ "Acquisition of DuProprio/ComFree" (Press release). Financial Times. 2 July 2018. Retrieved 4 May 2021.
  39. ^ "Purplebricks pushes into Germany with Homeday stake purchase". Reuters. 14 October 2018. Retrieved 6 May 2021.
  40. ^ a b Lewis, Nigel (17 June 2020). "Purplebricks invests more cash in growing German copycat". The Negotiator. Propertydrum Ltd. Retrieved 6 May 2021.
  41. ^ Midolo, Emanuele. "Purplebricks Canada Offered Employees Days Off For Made Up 5-Star Reviews". Forbes. Retrieved 2020-11-22.
  42. ^ "Axel Springer and Purplebricks make further investments in Homeday". Property Industry Eye. UK. 17 July 2020. Retrieved 6 May 2021.
  43. ^ "Inside the Purplebricks sweatshop: former agent accuses it of toxic culture". afr.com. 22 August 2018. Retrieved 18 September 2018.
  44. ^ "Fall-out in Australia reaches UK shores as ex-Purplebricks agent accuses it of failure". propertyindustryeye.com. 28 August 2018. Retrieved 18 September 2018.
  45. ^ "Leaked data from Purplebricks in Oz suggests it was 70% off target in June". thenegotiator.co.uk. Retrieved 18 September 2018.
  46. ^ "Purplebricks shares plummet on lower revenue forecast". Reuters. 21 February 2019. Retrieved 22 February 2019.
  47. ^ "Purplebricks to quit Australia". Australian Financial Review. 2019-05-07. Retrieved 2019-05-08.
  48. ^ a b Clarence-Smith, Louisa. "Purplebricks shuts down cash-hungry American business". ISSN 0140-0460. Retrieved 2020-02-21.
  49. ^ "Purplebricks to quit Australia". Australian Financial Review. 2019-05-07. Retrieved 2019-05-08.
  50. ^ GmbH, finanzen net. "Desjardins Group acquires a real estate holding, including DuProprio, from Purplebricks Group plc for CAN$60.5M | Markets Insider". markets.businessinsider.com. Retrieved 2020-11-22.
  51. ^ Press, The Canadian (2020-07-16). "Desjardins acquires two real-estate brands from U.K.-based firm - BNN Bloomberg". BNN. Retrieved 2020-11-22.
  52. ^ "U.K.-based real estate brokerage firm Purplebricks pulls out of Canada, sells operations to Desjardins". Retrieved 2020-11-22.
  53. ^ Metcalf, Sam (3 August 2021). "'Resilient' Purplebricks ready to focus on UK". TheBusinessDesk.com. UK. Retrieved 4 May 2021.
  54. ^ Metcalf, Sam (7 August 2021). "Purplebricks CEO focused on building share in UK through better customer experience". Proactive. UK. Retrieved 4 May 2021.
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