Two leading property analysts have written a fiercely critical assessment of the merger between easyProperty and the Guild of Property Professionals.
The merger, announced earlier this month, will see GPEA - the Guild’s parent company - licence the Easy brand to its membership, with participating agents offered the chance to use marketing methods including up-front online sales and lettings packages.
Guild members and Fine & Country agents will be able to licence the easyProperty brand for £500 per territory. The easyProperty brand will remain in the budget marketplace, aiming to compete with Purplebricks.
Now Eddie Holmes, the chair of the UK PropTech Association, and James Dearsley, a high profile industry commentator on technology issues, have written on the PropTechConsult website that various questions have been raised about the merger within the context of the onward march of digitisation in the agency world.
Firstly the article disputes whether it is a merger at all, or more a buy out of the Guild by easyProperty using funds provided by the online agency’s main investor, Tosca Fund.
Then the article makes sharply critical assessments of the two parties’ financial positions: it points to easyProperty’s high profile operating loss of £11.3m in the year to September 2016, and suggests that the Guild’s membership may be well below its stated 800.
Holmes and Dearsley then go on to contrast the sharply different branding propositions - the Guild emphasises prestigious and lucrative with its Fine & Country brand, while easyProperty emphasises good value and ‘taking on the big boys’.
This contrast makes it difficult to offer a low cost service. “How on earth will this proposition affect the incentives for the small businesses which make up the Guild’s membership base and the people they employ? Can you truly imagine a Guild agent walking through the door with a Fine & Country hat on and switching it midway through the appraisal for an EasyProperty hat?” ask the writers.
The pair conclude a long and detailed argument by saying that digital transformation of the type the Guild has suggested it is undertaking can in fact only succeed when a firm looks at its existing strategy, draws up an action plan and appoints key people to oversee and implement the changes.
“Where is the evidence of this in this transaction? It looks like a fait accompli presented to Guild members with a ‘like it or lump it’ approach” claim Holmes and Dearsley.
It’s a provocative piece and you can read it here.