Purplebricks has this morning confirmed that it’s ending its self-employed Local Property Experts operation and is moving to “a fully employed model for its field sales agents.”
The agency has long prided itself on LPEs being self-employed, and waged many battles with critics arguing that the self-employed status could not survive; as recently as last month, chief executive Vic Darvey told Estate Agent Today that LPEs in their self-employed form were to be the backbone of a new emphasis on ‘localness’ in a marketing blitz this autumn.
Purplebricks currently has some 600 LPEs; in addition today's announcement, made to the London Stock Exchange, speaks of an extra 100-plus "of the best agents in the industry who are ready to join it as opportunities arise.”
The statement says: “The move to a fully employed model for Purplebricks' agents represents a further enhancement to the Company's business model, following a review of how the Company can best serve its customers, support its field teams in the future, and meet the demands of a strong market.
“The Board now believes that moving to a fully employed model will ensure that the Company can scale up quickly to meet consumer demand and, to that end, the Company has already created a talent pool of over 100 of the best agents in the industry who are ready to join it as opportunities arise.
“Having ownership over the recruitment, training and management of a unified high-performing team will support the delivery of a consistently high level of service to Purplebricks' customers across the country, including an enhanced opportunity to increase ancillary revenues.
“Additionally, it will provide greater security and benefits to incentivise Purplebricks' agents. The Company's newly employed sales team will enjoy a highly incentivised package with the ability to work flexibly and remotely, in keeping with the Purplebricks entrepreneurial ethos and changes to ways of working that have come about because of the pandemic. Agents will also benefit from the rights that come with employee status as well as having access to many new opportunities for career development and growth.”
Vic Darvey tells shareholders: "I am proud to be announcing plans to make our sales team permanent employees. The pandemic highlighted the challenges of being self-employed for many people - which is why we created the £2.2m fund to support the agency field during recent challenging times. As normality returns, we believe that moving to a fully employed sales model will benefit and support our people and make Purplebricks fit for the future.
"Not only will this enable us to better protect and incentivise our agents, it will also allow us to scale up quickly to meet consumer demand, and continue to deliver a high quality, locally based service for our customers. It will also ensure that we can continue to drive a more consistent, high-performance culture and experience for all of our customers, helping us deliver a next generation estate agency service to buyers and sellers alike.
"The Board strongly believes this move will increase market share and enhance performance in the coming years."
Yesterday the stock market pundit website Motley Fool suggested investors look afresh at Purplebricks. It said the agency “finally put years of losses behind it and recorded and pre-tax profit of £3.6m for the financial year to April 2021. This was driven by a 13 per cent improvement in annual revenues, which clocked in at £90.9m.”
Although Motley Fool went on to caution that Purplebricks’ shares were still high priced, two factors fell in its favour.
The first was the recent house buying boom in the UK, and the second was that it was expected that “the online business model [would] thrive as the broader e-commerce market lifts off. Britain has the third-largest online shopping sector on the planet. And whether it be for shoes, groceries, cars or houses, virtual shopping is growing strongly in the wake of Covid-19.”
Despite speculation over the LPEs, Purplebricks’ share price yesterday fell only 0.97 per cent to just over 71p.