Purplebricks, the U.K.-based firm that shook up the brokerage world with flat-fee commissions, has shuttered its operations in Australia and plans a full review of its U.S. business.
Following rapid expansion yet poor returns, the company’s stock price has plunged 65 percent in the past year. Its U.S. and U.K. chief executives left the company in February and this week Michael Bruce, its founder and current global CEO, is also stepping down, according to Inman.
Vic Darvey, previously the firm’s chief operating officer, has moved into the role of chief executive.
The company said this week it is withdrawing from Australia more than two years after entering the markets there, and said it would now conduct a full review of its U.S. operations.
“The board has materially cut investment in marketing and other overheads to reduce expenditure to sustainable levels and begun a strategic review,” the company said in a statement to investors, Inman reported.
Purplebricks blamed rapid expansion and investments for its poor financial performance.
The firm, which launched in the U.S. in 2018, operates in California, New York, Connecticut, Nevada, Arizona, Florida and New Jersey. It first offered $3,200 flat-fee commissions to brokers before increasing it to $3,600. Those prices now depend on the Zip Code. Prices range from $4,950 in Las Vegas to $5,950 in Queens and $8,950 in Manhattan.
In February, amid the departure of executives, the company’s share price plunged 39.5 percent, and it slashed its forecasted revenue for 2019 to $170 million to $183 million, down from $242 million. [Inman] — David Jeans