In an exclusive and candid interview with Estate Agent Today, Countrywide chairman Peter Long has admitted that the company had been “grossly mismanaged” in recent times, and promised to get back to basics in 2018.
Long says there had been a number of fundamental mistakes in the so-called ‘retail revolution’ which had been tried in the company in recent years, which had contributed to the firm's poor 2017 performance.
“Why didn’t it work? Well, because it’s not a retail business. It’s a trading business and it’s all about the fundamentals - lead generation, listing and selling properties, building up inventory, giving the branches resources” he has told EAT editor Graham Norwood.
“We lost clear visibility of this as a business, and as a result we lost a lot of good industry people. I’m extremely sorry about that. The business became more centralised, with central costs impeding and stopping the branches operating as they should have been” he says.
Long also expressed how sorry he was that many talented people had been brought into the organisation on the belief that it was somehow going to operate as a retail entity when that wasn’t what core estate agency was about.
On Countrywide’s controversial attempt to introduce a digital ‘multi-channel’ proposition - where agents in branches would offer prospective clients a no-frills online service from which they could ‘trade up’ to a full service option - Long was particularly dismissive.
“It didn’t work. It confused the customers and it confused the staff. Well over 90 per cent of transactions take place in traditional ways and we’re getting back to that - the only way to recover our stock and our share” he says.
Although Long says at some future date Countrywide would assess how digital activity was impacting the wider market, it would have no role in the company’s activities in the immediate or near future. Instead, he told Norwood that Countrywide would play to its strengths. “We’ve still got the largest network of offices in the UK, we’ve got well-known brands, we’ve got fantastic local expertise. All that knowledge we have in-house is incredibly important.”
Long admits that Countrywide had been “grossly mismanaged” and had lost the strengths which it had when it floated on the stock market “not that long ago” in 2013 - strengths characterised by what he called “decent, entrepreneurial and highly experienced” staff.
Long also defended his role, and that of the board of Countrywide, in not acting more rapidly to recognise that the retail strategy had been unsuccessful.
“You have to allow a strategy to play out to some extent to see if it can be implemented and to see if it can work” he says, revealing that although former chief executive Alison Platt left the company only a few weeks ago, the journey away from the retail strategy started some months earlier, on a lower-key level.
“This journey began back in August with the departure of the managing director of retail [Sam Tyrer]. The reset process actually started then” says Long.
He says no consideration was given to breaking up Countrywide, as some industry observers have suggested, because “the sums of its parts is much greater” and Long ruled out the sale of the commercial arm, Lambert Smith Hampton, which some 18 months ago was tentatively touted for sale by the former Countrywide leadership.
On staffing for the future, Long reiterated the belief - set out in the company’s trading statement for 2017, released this morning - that traditional expertise was vital to attract back to the organisation. “But I am also delighted that so many loyal personnel stayed during very difficult times.”
He says that for the moment, the company will be led by the triumverate of Long himself as executive chairman, Himanshu Raja as chief financial officer, and Paul Creffield, who steps up to the position of group operations director. Any decision on the role of chief executive, vacant since the departure of Alison Platt, has been put on the back burner for an unspecified period.
Long then repeated pledges to return resources to branch level to try to build back inventory and reputation, but gave a stark warning that things will get worse before they get better, with the company’s pipeline low and its market share likely to drop further
“There’s no quick fix. We’re in the business initially of stabilising the business but to do that it will look like we’re moving backwards before we move forwards.”
However, Long optimistically noted that Paul Creffield had already been “inundated” by former employees seeking to return and by newcomers wishing to join the reinvigorated organisation.
Long promises frequent market updates and a more transparent approach than seen from the company in the recent past, including greater respect for expertise, entrepreneurship and experience in the core businesses of sales and lettings.
“That’s what getting back to basics really means” he says.