Michael Bruce, founder and chief executive of Purplebricks, is stepping down from the business with immediate effect.
Purplebricks is also quitting its Australian market and reviewing its US operations where it is looking at making cost efficiencies.
In the first hour of trading this morning, Purplebricks’ shares slipped by almost 6%.
Bruce will be replaced by Vic Darvey, who was previously chief operating officer, and joined Purplebricks only in January.
The statement released to the London Stock Exchange this morning said: “Whilst the UK property market remains challenging, the company continues to out-perform the market and the board remains confident about the future of the business.
“Having established a market-leading position, there remain many opportunities for further profitable growth and this will be a key area of focus going forward.”
Purplebricks said that the prospective returns from Australia “are not sufficient to justify continue investment.” The business there will be run down with immediate effect, pending closure.
In the US, Purplebricks has materially cut investment in marketing and overheads, and begun a strategic review.
Today’s statement said: “As part of this review, management proposes to examine the options for delivering the next phase of growth in a more effective and cost-efficient way including more closely considering the opportunities and risks associated with a materially scaled back US business.
“A further announcement on this strategic review will be made in due course.”
Shares in Purplebricks have fallen by more than 60% over the past year.
Non-executive chairman of Purplebricks Paul Pindar admitted to mistakes.
He said: “With hindsight, our rate of geographic expansion was too rapid and as a result the quality of execution has suffered.
“We have also made sub-optimal decisions in allocating capital. We will learn from these errors and will not make them again.”
No announcement has been made about co-founder Kenny Bruce, who is understood to be in the UK helping oversee operations here.
However, this morning, Pindar paid tribute to Michael Bruce, saying: “I would like to place on record our thanks to Michael for the truly remarkable contribution that he has made to the creation and development of Purplebricks.
“Michael’s vision in creating the UK’s leading hybrid estate agent has been deeply impressive, as has his relentless energy in developing the business both in the UK and internationally.
“The board is delighted to have an executive of Vic Darvey’s calibre to take on the leadership of our business for its next important phase of development. We have a lot to do and Vic has a clear vision of the priorities we need to address.
“Importantly, we are very conscious that the group’s performance has been disappointing over the last 12 months and we sincerely apologise to shareholders for that.”
Comments (105)
Shares will take a knock tomorrow as most will want to cash in and run…
Party has started, run while you can. We coming to get you!!!
They will close America next and say they will concentrate on the UK and try to get further funding.
I think it’s too late for that chaps…Bye Bye PB!! At least they had a good ride…
You laugh at their apparent demise and then you will cry.
Purple Bricks will pull the plug on the US and then focus 100% on the demise of the independent agent to establish overall dominance on the high street with a pay now or later offering. The greedy, lazy, unqualified estate agents who continue to offer “I’ll take some pictures, write a description and list you on Rightmove for a percentage of your property” IS DOOMED!
Please keep your head in the sand and your bum in the air as the target.
Lots of love and kisses,
The Prophet Sdaltaf
It will be the lazy 9 til 5 high street unqualified agents who will suffer.
Just because its an online model doesn’t mean they don’t have good agents?
Would the high street like to compare qualifications?
Let’s compare qualifications, what are you qualified in?
I am assuming you work for PB or another For Sale By Owner site.
The model didn’t work abroad in several locations and it doesn’t work as a long term profitable model in the UK.
Having said that there is a place for ‘For Sale By Owner’ Sites like PB.
Seeing as you repeated your post – I’ll repeat my response to the first. It went like this…
OOPS – you made a boo-boo in your post. Happy to correct the statement for you, Sdaltaf101 – here you go:
“The greedy, lazy, allegedly ‘qualified’ estate agents who continue to offer “I’ll take some cr@p pictures or scrape some from another agents listing, write a grammatically awful description and list you on Rightmove for a flat fee regardless of sale” IS DOOMED!”
There. Don’t want you looking more of a t0$$er than usual… do we?
To you (credit: Barry Chuckle)
Thank you PeeBee,
Nope………The quote was factual and correct:
“Purple Bricks will pull the plug on the US and then focus 100% on the demise of the independent agent to establish overall dominance on the high street with a pay now or later offering. The greedy, lazy, unqualified estate agents who continue to offer “I’ll take some pictures, write a description and list you on Rightmove for a percentage of your property” IS DOOMED!”
Now will you please put the kettle on and make a coffee for the staff, then will you empty the bins before you leave.
I’m a big supporter with care in the community so keep up the good work.
You know what… you’re a proper hoot, Sdaltaf101!
There’s a distinct lack of qualified Baiters these days – and you are clearly a Master of the art.
I am right in thinking you are a Master Baiter… aren’t I?
Promise me you won’t change a thing. We genuinely need people just like you in our lives.
You have the gift of making the most obnoxious souls we have the misfortune to encounter somehow waaaaay more bearable…
To cap it all he couldn’t help himself crashing into the Bruce retirement party.The publicity seeking Quirk has the neck to comment on Bruce burning investors cash .The man who burnt Crowdcube investors cash within nanoseconds
https://www.businesscloud.co.uk/news/purplebricks-pays-price-for-growing-too-quickly
The penultimate paragraph of that article is absolutely priceless – don’t miss it.
So what’s the score with his Brother?
Sporting Ken has been off in spirit for sometime Probably been adjusting the floodlights at his football club Anothe busy week looking likely for Ken
This Friday probably heading for Ascot to watch his horse Greek Zodiac run
https://www.racingpost.com/profile/horse/2142255/greek-kodiac/entries
Saturday
A quick hop to Lingfeld to watch his Mrs Discombe
https://www.racingpost.com/profile/horse/1969759/mrs-discombe/entries
A bit short of winners mind but never mind Ken won the lottery a few years back
Giddy up
“ We have also made sub-optimal decisions in allocating capital “
…..Sorry?
……..So, You F****d Up then?!
………….Just tell it like it is, rather than PurpleBlab!
A whole New Meaning for Commisery! Purplebricks can’t run their own business, yet they would like to sell your home?
Mime Artistes!
If you thought it was painful having Purplebricks around, I think the next level is coming.
Less Australia, means more budget for a very PROFITABLE part of the business (UK).
UK commission agents are going extinct. I believe it started with a Chris Woods
Another ‘Prophet’ here I see.
The only ‘prophet’ you’ll ever see on a Purplebricks article, methinks…
Next level garbage is still garbage.
You laugh at their apparent demise and then you will cry.
Purple Bricks will pull the plug on the US and then focus 100% on the demise of the independent agent to establish overall dominance on the high street with a pay now or later offering. The greedy, lazy, unqualified estate agents who continue to offer “I’ll take some pictures, write a description and list you on Rightmove for a percentage of your property” IS DOOMED!
Please keep your head in the sand and your bum in the air as the target.
Lots of love and kisses,
The Prophet Sdaltaf
Moron. You prove it with every post.
OOPS – you made a boo-boo in your post. Happy to correct the statement for you, Sdaltaf101 – here you go:
“The greedy, lazy, allegedly ‘qualified’ estate agents who continue to offer “I’ll take some cr@p pictures or scrape some from another agents listing, write a grammatically awful description and list you on Rightmove for a flat fee regardless of sale” IS DOOMED!”
There. Don’t want you looking more of a t0$$er than usual… do we?
Thank you PeeBee,
Nope………The quote was factual and correct:
“Purple Bricks will pull the plug on the US and then focus 100% on the demise of the independent agent to establish overall dominance on the high street with a pay now or later offering. The greedy, lazy, unqualified estate agents who continue to offer “I’ll take some pictures, write a description and list you on Rightmove for a percentage of your property” IS DOOMED!”
Now will you please put the kettle on and make a coffee for the staff, then will you empty the bins before you leave.
I’m a big supporter with care in the community so keep up the good work.
Response below.
You’re not worth the effort of a cut-n-paste – go fish.
As the glass shatters on deck, the captain braces the ships steering wheel.
“Oh hang on there’s a door there – abandon ship -sod the passengers the first life raft is for me” shouts Captain Bruce……
This is BAD news for UK Estate Agents .
It means that they have more money to spend on UK advertising.
PB UK makes money.
They are here to stay .
At last someone with an open mind seeing the big picture.
PB UK is a profitable business which had it profits used to prop up overseas losses.
Think you forgot to change accounts before fluffing up your original post pal.
Classic 🙂
I can’t stop laughing and this actually proves how important it is for some people for their point to be validated by others. Oh dear. Have PIE got access to IP address details to see who has logged in with two accounts but with the same IP address??
^ Just witnessed how Purplebricks 5* reviews appear ^
Brilliant! Public onanism from Delmor6758…
Some friendly advice…its best to keep your chap in your chaps, chap 😉
That’s some spin is that!
Do you honestly think PB have the funds to continually invest in tv, press and radio advertising whilst charging a grand? LPE’s on all accounts are leaving on mass. There is no money to be made.
Bruce has fleeced it for all its worth and now running leaving the investors to pick over the bones.
Yes but investers wanted a billion dollar company. Its now worth the same as countrywide with no growth prospects. They cant keep burning other peoples money forever…
Apparently Sky News at 1.30 could be worth a watch…
That was viewing pleasure, very well executed. Great in getting facts out there in such little time. I may have to put it on repeat in my office 🙂
Anybody got a link to it ?
Snippet here:
https://news.sky.com/story/purplebricks-boss-moves-out-as-expansion-scaled-back-11713521
I remember my former boss saying, “If you have a grand to spare, you could do worse than invest it in Purplebricks.”
Not only does it betray how out of touch he was with how much money a normal person has, he also proved himself to be not as smart at he thought he was.
Thank goodness I ignored his advice and left his employment!
Depends when he said it.and when you sold it. … Went up 500% at one point .
You have to admire the ambition and scale of PB’s launch. Unfortunately as sentiment turns and the investors lose faith, they will become a medium size UK business that has a place . They will not disrupt the market to the detriment of many agents. However, government interference and tax will be the issues agents need to combat.
I can’t admire them. They knew exactly what they were doing from day one ignoring exactly what the home buying process is and industry service sector is supposed to offer its customers. This is something that PB has never done and never intended to based on its low income fee business model ….. doomed from day one (7 years later) nothing but spin and using other peoples money …. while peddling “Commisery”.
How many properties did they ever sell? They dare not say … why? This is the reason the public use them, regardless of the cheap fee.
You really are a woodentop, they just had their 5th birthday.
Incorporated on 26 April 2012 (credit: Companies House)
The good news is that Woodentop is a reasonable sort – I’m sure a simple apology along the lines of “Oh my goodness you were right… as usual… and I now look an even more complete t0$$er than usual” will suffice.
“Better to Remain Silent and Be Thought a Fool than to Speak and Remove All Doubt”
It isn’t possible to automate estate agency or make many parts of our business more efficient. That’s why it can’t be done on very low fees.
Multiple viewings aren’t an efficient use of time, waiting for viewers who are late isn’t efficient but we do it. All the calls, all the discussion and negotiation and help and care isn’t efficient but it’s what sells houses.
As big areas of the economy are automated and get cheaper, the time intensive ones cost relatively more. Education isn’t getting cheaper because it’s not like buying a subscription to Netflix.
Estate Agency can’t be done cheaper because although we sell a product, it’s not our product and our value isn’t in the final sale transaction – it’s all the things we do to get there. We aren’t Amazon.
Great post!
Yes well said !! On that note this poor seller has enjoyed the full on Bricks experience
https://www.zoopla.co.uk/for-sale/details/40706252
What looks to be a very saleable property in respectableHeadington in Oxford listed at a very heady £975k in April 2016 After 3 years of unsoldness theBricks LPE has now convinced the seller the online auction is now the best medium .
Trimmed £325k off the fish and the starting price for the auction is just £650k .So far no offers If this property had been priced and marketed appropriately this would have sold a long time ago . Heh but the fee was cheap!!!
This sums it all up. Good post.
So remind me again how the High Street are Blockbusters and online agents are Netflix?
*Hatched
*Emoov
*Tepilo
*House Network
*EasyProperty
*Purplebricks
Anybody got a running total on investors money spent and vendors who’ve paid but havent sold ?
My calculator hasn’t enough digits.
The captain has abandoned the sinking ship and ran off with his share money. With the major investments banks already shunning PB over the last week or so, loses in the UK continuing and not enough money in the kitty to cover the rest of this years UK overheads, which could be gobbled up by closing its liabilities in OZ and USA … the end is nigh …. very soon.
I suspect there will be some very angry shareholders who will see this as the end with Bruce abandoning ship and overseas failures. Most, if they are sensible will try and bail out the quickest, for any delay could end up with nothing ….. how fast will the ball roll?
Do you have proof that the UK business loses money?
Do you have proof that it doesn’t?
There’s much more to come. Sad News for all those who were taken in by the hype and misleading statements/ reviews and for those genuinely good agents who were sold a pipe dream of self-employment but ended up as quasi ’employees’ on well below minimum wage and no employment-law safety net. The fat lady hasn’t even warmed up backstage yet…
Given the Bruce brothers track record over the years with for example the sale of Burchell Edwards to Connells and then a foray into property development. An exit now with the cash ( and lots of it ) seems about par for the course. Neither of the brothers are Estate Agents just pretty clever business people who ( with the help of others ) saw a huge gap in the market for a ‘ boom and bust ‘ model like PB and boy have they milked it to the tune of millions. Do you really think they care what is posted about them i for one don’t think so. They have made an absolute fortune and no doubt will already be planning another start up probably not property related i suspect.
We all know how poor this business model is – it is painful to watch vulnerable clients losing money to a scheme which the governing bodies and industry regulators should have attached a “health warning” to.
This also reflects very badly on the “savvy” investors who backed PB and promoted them. How many “mug punters” lost money on the share price collapse ?
I’ve got the theme music from “Countdown” playing in my head. You can only mislead customers, staff and shareholders for so long.
Is there any chance the global expansion was specifically to drive up the share price in the first place?
BSOS23PC
That’s a great point. Almost as if this would allow some to cash in their chips while the going was good.
Just to mislead investors for more cash.
Reading between the lines somewhat, it looks like investors have declined to pump any more money in. I should think discussions have been going on for a while now.
No great surprise. Making no progress in Oz and the USA growing revenue but eating up cash faster than the UK at the same stage by the looks of it. The slowdown of growth in the UK showed the early growth wasn’t even being carried forward in its home market.
£62m cash does suggest they’ve really cut back on marketing in the USA which was hinted at on their last announcement. Concentrating on L.A. & Florida. Always tough taking a business to the USA. Tesco, M&S and even Foxtons all failed.
No doubt some very happy PB bashers around 🙂
‘No doubt some very happy PB bashers around‘
Let’s keep it brief: YES.
Personally I would have been more than happy to see them carry on as they were. Woudl love to know how this has been spun to the employees, I mean self employed LPEs
Where have you been! Your thrupenny worth is old news and discussed in detail over the last week. A hint of desperation to worm yourslef out of years supporting PB. What will you do with yourself when it is all over …. inevitable.
Woodentop,
I’ve been talking about them potentially pulling out of Oz and the USA for a long while now. I actually check on their progress periodically with the UK being daily (apart from the odd time). I started to draw attention to the stalling progress in Oz elsewhere (possibly here too) as far back as March 2018 (just had a quick look).
If you check back to when they launched in the USA I actually said it would be a tough ask. That’s September 2017 EYE NEWSFLASH: Purplebricks is launching in America today Foxtons – Property Industry Eye
So if you’ve been talking about this for the last week then I apologise for my negligence in keeping up with your discussions 🙂
For the UK my proxy tells me that sales listings have increased 6% for the financial year to the end of April 2019. If you hate PB then you probably see me saying this as supporting them. I don’t see it as black and white like you, really I’m just commenting on this particular matter.
I apologise in advance if I don’t see any further discussion. Lots to do 🙂
What do you call a business that has to borrow from Peter to pay Paul?
I
N
S
O
L
V
E
N
T
Mark,
PB raised capital in exchange for a share in the company. It’s not borrowing.
Are you the Mark Walker who works in finance & admin for an Estate Agent? If so, then I suggest you go back and do some more studying.
Can someone please show profit & loss figures for the UK PB operation?
My understanding is that it makes profit .
Closing in Oz and probably in the USA .
Means profits made in the UK are no longer being wasted elsewhere.
Bad news for UK Estate Agents.
Or PB cant pile a load of costs onto the overseas brands
We are very conscious that the group’s performance has been disappointing over the last 12 months and we sincerely apologise to shareholders for that.
One of the funniest lines seen in print since Mrs May said ‘Brexit means Brexit’.
If they’d concentrated their efforts (and money) on the UK market they would have grabbed a far larger market share than they currently have. They would have been a real force and continued to grow….but arrogance and the Bruce’s craving for recognition and dominance abroad has scr3wed them.
good point , but once you have a tv advert and google adwords, what else have you got? Think they have reached peak oil.
Time the industry started fighting back and hard.
Im not sure high street agents should be gloating at the reversal of strategy.
Id be happier if they continued to burn through their funding at their previous rate.
Theyre probably aware that the next round of funding will be a lot more difficult…..
Spot on! This “house cleaning” has probably come as advice from their pro advisors and institutional investors as a pre-cursor to a final “drink at the last chance saloon” large money raise for the UK market where they have established a significant and currently unprofitable presence.
That would set the scene (and piggy bank) for a simple solution of acquiring bargain basement Countrywide and then re-engineer themselves into a “Bricks & Mortar” business offering “no sale, no fee” whilst retaining and sharing their substantial online offering for “upfronters” backed by real time office services.
Such “risk free” fun running other people businesses!
Let’s await what the great ‘Prophet Sdaltaf’ has to say on the matter.
Hello Property Pundit……….
I said on Friday Purple Bricks would leave the US and Australia and would change their strategy to focus on the high street.
So far one out of three.
“We have also made sub-optimal decisions in allocating capital” = Not having offices.
“Going” down “under”…?
UK market slowing so cutting the lose leaders in the hope they can retain a business here in the UK.
Good few million in the bank should give them the next 12 month trading, however no doubt they will need to raise further funds, not sure how easy they will find this as they are admitting they are a UK business not a worldwide business. Make a very big difference to where they are positioning themselves in the market.
No doubt the prat DelPrete will see this as a positive.
Reminded me of the song “There May Be troubleee ahead”
I think the lesson here is just because your name is Bruce, don’t think the Aussies will take you to heart. It’ll take more than a jolly purple swagman with a boiling tech billy under a coolibah discount to fool the Aussies. They’re still sore about their “transportation”, although I dunno why, it worked out pretty sweet.
What’s that old saying about rats and sinking ships??
Was always a crazy decision to think they could take Australia, given their fee scales and quality of agents.
The US may go the same way but I have a feeling that a lot of the peasants in the UK will still embrace price over service.
What? You mean World domination is not achievable by creating a cheap bargain basement business model for what is a highly complex industry…….
Who’d of thought, not the investors obviously?
Keep an eye on the share price!
There´s a sad sort of clanging from the clock in the hall
And the bells in the steeple too
And up in the nursery an absurd little bird
Is popping out to say “cuckoo”
Cuckoo, cuckoo
Regretfully they tell us Cuckoo, cuckoo
But firmly they compel us Cuckoo, cuckoo
To say goodbye
Cuckoo!
To you
So long, farewell, auf Wiedersehen, good night
I hate to go and leave this pretty sight
So long, farewell, auf Wiedersehen, adieu
Adieu, adieu, to yieu and yieu and yieu
So long, farewell, au revoir, auf wiedersehen
I´d like to stay and taste my first champagne
So long, farewell, auf Wiedersehen, goodbye
I leave and heave a sigh and say goodbye
Goodbye!
I´m glad to go, I cannot tell a lie
I flit, I float, I fleetly flee, I fly
The sun has gone to bed and so must I
So long, farewell, auf Wiedersehen, goodbye
Goodbye, goodbye, goodbye
Goodbye!
Administration coming soon for this lot 🙂
I’ll get my popcorn ready for the comments…
Australia was draining the money, its a good business decision to close it down. Look out to all the high street PB haters out there though, Purplebricks now have more to spend on the UK business.
I hope this was Michael’s decision to leave and not pushed out by share holders. Well done for having the balls to disrupt the industry and for the better I say.
Sorry , although Michael an impressive individual Oz and USA were an arrogant step too far .Fair play though he managed to get Axel to fund it to the tune of £120m .Ken was no Alexander the Great seemingly more interested in his football club Larne and his racehorses
Nice try but failed
UK looks to be flatlining the100k pa instructions looking far over the horizon
This is a £150m company at best !
‘Purplebricks now have more to waste on the UK business’.
There, corrected it for you.
“I hope this was Michael’s decision to leave and not pushed…”
If it’s Kenny next and a cull of the existing management – then you will have your answer !
Just like the Bruce brothers who failed in the High Street in the UK before they started their little venture [Word removed as it breached posting guidelines], you have no idea about Estate Agency service sector. They didn’t revolutionise the home buying process .. all they did was offer a cheap and poorer service, while they burned other peoples money.
As to “Well done for having the balls to disrupt the industry and for the better I say”.
Congratulations for praising people who have made a complete misery for their own staff (PB), their customers (PB) and will go down in history as one of the biggest scandals for investors. Any “Future Tech” guy that wants to try and open up in Oz or the USA is going to overcome the legacy created by Bruce & Co.
Woodentop…you think YOPA is on the high street
Children shouldn’t throw stones near glass buildings.
I said it before you wouldn’t comprehend but seems you have no knowledge of estate agency or lack of intelligence (and you say you are a teacher) which high street agents who cover the UK, are investors of YOPA?
So before you make further comment on a subject you cleary have absolutely no idea about, do some research and then you won’t look like an idiot.
Woodentop
You think YOPA is on the high street.
And the Muppet award goes too?
Congratulations and don’t forget to shut the door behind you, and will you empty the bins before you catch your bus.
Muppet……
Same old arguments. Same old put-downs. Nothing new to bring to the table.
ANY table. You’re an empty vessel. Even the copious bu115h!t has stopped flowing.
So… as the final curtain draws on your short and, frankly, unimpressive show…
LAYDEEZ AND GENTLEMEN…
…Please give it up for the original one-trick pony –
Prophet’n’Loss
(Don’t bang the door too hard on the way out. Best to leave trying to act a good loser than the petty-@$$ t0$$er you’ve shown yourself for. There’s a good boy. Or girl. Or whatever.)
They have £62 million in the bank, which suggests they have been cutting costs heavily in the last three months. Presumably they needed to – to fund Michael Bruce’s payoff and head office closure in Oz over the coming weeks.
Yes they’ve stopped paying their LPEs underpins – paying some just a few hundred pounds a month for working 7 days a week 12+ hours a day and putting huge pressure on them to leave.
Surprisingly slow on this!
Let chaos in the comments ensue….
Zombie firm – that’s the leg rotting away and falling off then. Lets see what festers next as this corpse stumbles on.
I honestly thought this would have happened by Xmas 2018. Can’t always be right! 😀
The difference being in america and australia they have governing bodies who protect business and trading standards that warn the public.
This could go two ways. Absolute carnage while bricks destroy UK estate agency or could be the end of them. I ‘ll go for the first one.
RIGHTMOVE / ZOOPLA etc time you changed your policy to ban PAY ANY WAY agents. You are the problem .
Interesting website : http://purplebrickssucks.com/
now, can anyone tell me how to get this into the public domain in my local area without looking like a bitter agent ?
#fineLines
Find a similarly minded agent in another area
Well its no surprise. I feel for the carnage that MB has left behind again, good people trying to earn an income to support themselves and their families.
Other than that I hope the PB model continues to crumble , Mb left carnage etc in the Midlands with his traditional estate agency.