Yesterday afternoon, Helena Marston was finally confirmed as Purplebricks new CEO after all the due diligence checks that are required for companies on the Alternative Investment Market (AIM) were completed.
In the announcement, a number of disclosures were made, including the fact that Marston voluntarily declared herself bankrupt in September 2014, before this was discharged a year later. It was also revealed that she will hold options over 1,983,282 ordinary shares of 1p each in the company under the Purplebricks Performance Share Plan at an exercise price of 1p per share.
She joins a company that has in recent times lurched from scandal to scandal, but what are the main challenges the 39-year-old – who has no agency experience outside of her two years at Purplebricks – is likely to face?
Completing the transition from self-employed to fully employed
In August 2021, the agency announced a move away from self-employed agents – known in the field as Local Property Experts and long one of its flagship USPs – to fully employed agents instead.
This started on the sales side and is now being expanded to the lettings division as well, with £2.2 million set aside to execute the change of status of agents, which the company said would also allow the workforce to ‘scale up quickly to meet consumer demand, and continue to deliver a high quality, locally based service for our customers’.
Dealing with the class action
It was recently revealed that lawyers working on a class action against online agents including Purplebricks have said they will be ready to send a letter before action in weeks.
The pressure group, Contractors for Justice, has proposed a Group Litigation Order to highlight ‘unfair working practices’ that have meant local property experts have missed out on benefits.
A leaked document, seen by Estate Agent Today, has revealed that a letter before action will go out in ‘the coming weeks’.
Around 400 agents, mostly formerly with Purplebricks, have now signed up to the class action.
Purplebricks insists there is no legal basis for the claim, but similar cases have been won in the past, involving companies such as Uber.
Fixing the lettings issue
At the beginning of the year, Purplebricks revealed that it will cost some £3.6 million to correct compliance issues in its lettings division.
Late in 2021, the Daily Telegraph uncovered that an unknown number of deposits taken from tenants by the agency were not registered with any one of the three government-backed schemes (MyDeposits, the Deposit Protection Service and the Tenancy Deposit Scheme) – arguably the biggest scandal to face the agency so far.
It has previously denied that it will sell its lettings division, which is much smaller than its sales operations, with only 30 LPEs, but if more problems were to emerge, it could think again.
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It is a tough ask for Helen Marston that's for sure! I worry that another appointment with no agency experience at a time when the market is getting tougher and PB's stock levels are already reducing and their Letting inventory is extremely poor, plus dealing with a masisve drop in the share value which will be having investors demanding answers, the lawsuits from employees and the potential cost of the none registration of deposits is alot to deal with for anyone, let alone someone who isn't really a property person. I wish her well and will be watching with interest to see what happens next.
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