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Leading analysts fiercely critical of Guild merger with easyProperty

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

  • Simon Bradbury

    An interesting item , as is the related original article which I would urge all interested parties to read carefully.
    However, in my view the analogy of "...a Guild agent walking through the door with a Fine & Country hat on and switching it midway through the appraisal for an EasyProperty hat?" is a totally false one and a distortion of reality.
    This approach has never ever been suggested in any of the communications from The Guild or at any of the very well attended "roadshows" .
    As far as I am aware (and I have attended one of the meetings and received additional communication detailing the proposition ) Guild and Fine & Country members are simply being given an opportunity to operate a well known and totally separate brand as is common in modern business and indeed in estate agency.


  • James Dearsley

    Thank you for the feedback Simon - appreciate your point about the original article too. We really wanted to curate a lot of thoughts from others on the deal - rather than purely our own.

    Your point about the wearing of hats is valid which is why part of the issue is the potential that members have to recruit to facilitate the wearing of different hats. It is the only sure fire way of working Easy as a fighter brand rather than just an add on, expecting staff to work with each brand.

    The original deal is being offered as a right of first refusal to all members - if they don't take it up do you expect Easy to simply say ok or offer it up to someone else locally? Then you have brands in a strategic partnership competing against each other locally......

    Simon Bradbury

    Thanks James,
    I do concede that there is a potential conflict of interest and strategy if a local Guild colleague or non-Guild colleague were to take up a licence in "our area" and we didn't.

     
  • Simon shinerock

    Any traditional agent operating a dual proposition is asking fir trouble. The only reason discount online might work for some is the size of the marketplace, effectively a national niche. The discounted proposition won't work in most localities , especially if several agents try and do it. There seems to be some kind of madness going round the industry at present, along the lines of 'if so and so is doing it, it must be a good idea' it isn't. The thing we have to learn from online is their automation and functionality which currently surpasses what we have on our desktops, there lies the opportunity

    James Dearsley

    Couldn't agree more Simon.

    There is a huge move to modernising the industry at present - generally called Digital Transformation. However, this takes time, energy, lots of thought about how businesses can work together, getting staff buy in, ensuring systems work together etc etc.

    As with the piece we did on Countrywide, it is the right mentality but deployed in the wrong way.

     
  • Simon Bradbury

    Hi Simon,
    Very respectfully, there are examples of a dual proposition working very effectively in estate agency... Fine & Country ( ironically) is such an example.
    In my view, the right brand, the right staff and the right proposition (with some of the benefits of economies of scale) can be a very potent mix even if, and sometimes even because, it sits alongside another "core brand".
    Therefore, the question is not if an agent can successfully operate two or more brands, but if this particular easyProperty brand (with it's accompanying I.T. and marketing know how) offers the realistic potential to access a market place that the core brand is unable to reach as easily or cost effectively.

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