The chief executive and founder of a developer and property investment group says Purplebricks is “an excellent business” but its recent financial problems may make it appropriate for a UK or global High Street agency to take it over.
Phillip Nunn heads The Blackmore Group, which has offices in London, Manchester and Dubai, and which in 2017 appointed Purplebricks to market homes on its St Augustine’s Church development in Greater Manchester.
“Purplebricks is an excellent business. They have a revolutionary model, but every estate agent will be feeling the same with Brexit looming and slowing UK housing market” says Nunn.
“I actually think Purplebricks has the right idea in regards to their concept and business model because they are an innovation first business, ultimately they will be fine because they continue to stay ahead of the curve.
“The Blackmore Group has worked with Purplebricks and they are very efficient. Like most disruptors who are genuine innovators in their marketplace, such as Tesla, it is their constant drive to innovate and be the most ground-breaking in their sector that can also, unfortunately, make them subject to more volatility.
“Also, because Purplebricks is less established in the market they will be more vulnerable to market fluctuation. Larger, more established firms, like Savills for example, will not suffer as much as a result of the challenging climate we are now in for a number of reasons. They have a long-term business, they are more robust in terms of diversification and they have more access to international markets.
“What might also happen for Purplebricks is that this situation may open the doors for one of the older more established estate agents or bigger brands, be it UK or global, to come in and acquire them.”
Last week Purplebricks gave a profits warning based on a forecast of lower-than-anticipated revenue from its Australian and US business; its share price subsequently fell 24 per cent in one day although this has recovered slightly in the past two days.
In the summer of 2017, when The Blackmore Group selected Purplebricks to market its Manchester scheme, Blackmore managing director Patrick McCreesh said: “We chose Purplebricks because it operates 24/7 and their service is incredibly popular with consumers. The Blackmore Group are pleased to be marketing this scheme with Purplebricks and building a relationship that will accelerate the growth of both companies, with plenty of developments in the pipeline over the next few months. It’s the start of a great partnership.”