In recent weeks Countrywide has admitted to Estate Agent Today that it is now closing some branches, although it remains tight-lipped as to how many and where. This morning it is reported that the company is embarking on a ‘sale and leaseback’ programme with a small number of its branch offices.
Quirk continues: “It is time to get real and to implement a strategy that allows this once great estate agency institution to be great again. My strategic plan is available free of charge with no strings attached (I’m not looking for a job). Take it. Digest it. Discuss it with me and put the business back on track before there is nothing left.”
And he adds: “Banking covenants must now be being breached, staff morale at rock bottom and the slippery slope of ‘just closing a few branches’ is death by a thousand cuts.”
In recent months Quirk has suggested that in his opinion online estate agencies are likely to reach no more than 10 per cent market share overall; he has also given views on how the troubled Foxtons brand could improve its fortunes by expanding beyond the M25.
In yesterday’s social media comments Quirk made no reference to the details of his Countrywide plan, but almost a year ago he gave a glimpse of what he might have in mind in a contribution to Estate Agent Today. Back then he wrote:
Countrywide will continue to suffer from poor performance (relatively) and a relentless attack on its share price until it is future-proofed. Currently the ship is listing (no pun intended) and the shareholder lifeboats have been thrown to the icy waters below.
Six months into the 'post-Alison' era and who would have thought that a Countrywide share could degrade even further and can now be bought for less than the price of a chocolate bar, albeit more Breakaway than it is Bounty.
Titanic and confectionery analogies aside, there is a way forward for this once great institution.
With over £195 million of debt, Countrywide's market capitalisation is now way below that.
It is technically insolvent and has broken its banking covenants.
Existing shareholders coming to the rescue with a proposed £100 million rights issue will only do so at a discount on today's price and this translates to a value that is lower again.
Without structural transformation, the direction of travel will remain depressingly downwards thereafter.
The answer requires the sale of a number of their existing brands in order to a) reduce the debt burden and b) to consolidate its cost base which is much too heavily predicated around increasing high street rents and escalating business rates.
The resulting core business of a smaller basket of brands could, with a complete change of approach, prosper with the utilisation of proper, proven technology and well-executed, modern marketing methods. A thinner 'brand estate' would also allow marketing budgets to focus better and with far greater 'above the line' cut through. Margins would increase (via a full-fee proposition), profits would be restored and the City placated.
Countrywide does not need 850 branches to reverse its eroding position as the UK's largest estate agency. That's a vanity metric these days. Indeed it is this profit and loss millstone that is one of its major vulnerabilities in an increasingly digital consumer world.
Some are needed, yes. But customer numbers can be gained in areas that do not have one, two, three or more Countrywide office fronts.
I've formed a detailed strategy that would make Countrywide great again that I'll share if asked. It's a shame that so far no-one has done so, despite its share price briefly rallying by over 20% two weeks ago on rumours that Emoov and Countrywide might collaborate.
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It’s hardly rocket science is it. Fundamentally, Countrywide has allways been an unnatural business in that it would never have grown as large as it has organically. The roots of its creation date back to the 80s crash and at no time has it shown itself able to compete with or successfully acquire and maintain quality brands. Sure there is probably a profitable rump left in the old behemoth but what’s dragging it down isn’t lack of up to date tech, or online agencies, it’s simply it’s inability to compete in a tough market. This lack of competitiveness has nothing directly to do with fees, it’s about the quality of the leadership, management and personnel right through the business, in current conditions Countrywide would need a true game changer to survive in anything like its current form. Of course I have that game changer but as with Russell, I’m waiting for the knock at the door, unlike Russell, my solution would not be free.
I believe they should take RQ's advice, at least the pain of watching this steady decline will be over much quicker and we can all move on! The quality employees will always find more work, even in this market and the foolish shareholders (myself included) can lick our wounds and find something else to back. RIP CW!
Can’t quite understand why this gobshite feels he can dish out advice?
Never a truer word said
Another Stratton Creber office to close in Cornwall (Penzance), that's four in the last few weeks.
I am surprised that Mr Quirk has such foresight about Countrywide's business when he seemed to have so little for his own.
I too struggling with RQ. Perhaps he's learnt from his mistakes. Nothing in life is free by the way!
As for advising Foxtons to expand outside the M25... The brand itself and over zealous nature of their Manager's is their undoing. Quite obviously and statistically proven have the highest number of days on market with a property in our area. Prime example this morning. Sales Manager went out today valued a property £425k. Potential vendor said we were wrong £475k with Foxtons value. Then we showed him the comparable archived one (among others) at £475k which he agreed was his. It had been on the market six months previously no offers. More fool vendors for being greedy too, but Foxtons continue to ill-advise vendors and Landlords continually. Such a frustrating practice and loses countless families money in the long run. That will be Foxtons downfall as the market declines and gets tougher. More businesses will suffer too if they continue to send out unqualified, inexperienced agents to value property. Lets not forget the most expensive asset ever owned and entrusted to someone who has plucked a figure out of the sky to suit.
There is not enough room in this industry for businesses to have faceless shareholders. The climate has changed so much over the last 20 years, this is an adjustment to the industry badly needed. Only the honest, transparent, qualified, experienced and hard working for customers will survive. It's really not rocket science!
Whilst i don't completely disagree. I would add that there is an equivalent to Foxtons in every town in the UK. The agents or agents who constantly over value and prey on the greed of the vendor. It's not unique to Foxtons.
Russell Quirk - 'chief executive of collapsed online agency Emoov' - what a clown !! (which is possibly derogatory to clowns) Very sad to see the demise of Countrywide.
Some serious rumours within the business of major widespread branch closures.
Taylor’s Brand in Bristol looks like going
To be fair CW has always been a badly managed business. It was successful in general in spite of itself rather than because of it. It was only ever a matter of time before its culture and arrogance caught up with itself. The treadmill of churning staff at the rate of 160% was simply not sustainable.
Keep up with tech or you will be left behind.
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