The Real Deal National

Purplebricks pulls out of the United States

It comes two months after the UK-based fixed-fee residential brokerage pulled out of Australia
July 03, 2019 09:11AM

Purplebricks CEO Vic Darvey (Credit: iStock)

Purplebricks CEO Vic Darvey (Credit: iStock)

The flat-fee brokerage Purplebricks has announced a withdrawal from the United States, two months after shuttering its operations in Australia.

It brings an end to a valuation slump for the UK-based residential firm, which charges homeowners a fixed fee, whether a property is sold or not.

Since entering the U.S. in September 2017, the company recorded a 75 percent drop in valuation, and reported a $42.9 million operating loss in the U.S for the past 12 months, more than double the year before, Bloomberg reported.

But Wednesday’s announcement prompted a welcome 5 percent spike in the company’s stock price. The company, which launched in 2012, is currently valued at $377 million.

Purplebricks has undergone a flurry of management changes amid poor performance. In February, the firm’s U.S. and U.K. chief executives left the company and its founder and global CEO, Michael Bruce, left in May.

At the same time, Vic Darvey, previously the firm’s chief operating officer, moved into the role of chief executive, and oversaw the review of U.S. operations. The company said it will now focus on its U.K. and Canada markets.

Purplebricks – which operated in California, New York, Connecticut, Nevada, Arizona, Florida and New Jersey – first offered $3,200 flat-fee commissions to brokers before increasing it to $3,600. But in some ZIP codes, those figures varied from $4,950 in Las Vegas to $8,950 in Manhattan. [Bloomberg] – David Jeans