Carphone Warehouse founder Sir Charles Dunston says he's always been a Purplebricks fan' model
Entrepreneur who bought Purplebricks believes he could be the 'Aldi or Ryanair' in real estate after saving the business from collapse with a £1 rescue deal.
Sir Charles Dunston has vowed to take over the property portal to return to his breakout roots as he pledged to shake up his business model to revitalize productivity.
The £1,000 initial fee for Purplebricks property listing will be waived and replaced by a fact. go model, he said.
Sir Charles said he thought Purplebricks could still compete with its established brand, despite recent problems that narrowly avoided its collapse.< /p>
“The founders of Purplebricks really blew the market, but the business went a little off track,” Sir Charles told The Telegraph. “We have the ability to get it right and complete this journey.”
Sir Charles, who founded Carphone Warehouse and now runs TalkTalk, is a major contributor to rival online real estate portal Strike. He plans to merge the two companies under the Purplebricks name to compete in the online listing market.
The combined business will offer a low-cost listing model for people looking to sell their property online, charging a service fee rather than a commission based on the value of the home.
“Our market position is: Aldi or Ryanair,” Sir Charles said. “In an environment of high interest rates and a time of cost of living crisis, people should turn to a business like Purplebricks.”
Strike bought Purplebricks on Wednesday for a token £1, suggesting that “virtually all” of the company’s debt .
Purplebricks employs 750 people, but Sir Charles warned that jobs could be cut unless productivity improves quickly.
Sir Charles said: “Purplebricks' listings have dwindled over the past few years. It was too big a business for such a small number of proposals. Now we either get more listings or we cut the business.”
New listings on the platform have almost halved in the last few months of 2022 as the company's financial troubles mounted. Purplebricks received instructions for only 5,672 new properties in the last three months of last year, compared to 10,964 in the same period in 2021.
Sir Charles added: “At the moment everything is running as normal and our existing customers ensure business continuity.”
Increasing productivity could be a challenge given the real estate market is experiencing one of the worst downturns in history. years caused by rising interest rates and the consequences of Liz Truss' mini budget in September last year.
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However, Sir Charles said: “The real estate sector is healthier than it was. And we seem to have overcome cowardnomics.”
Purplebricks was launched in 2014 by brothers Michael and Kenny Bruce and at the time promised to change the way homes are bought and sold in the UK.
The company promised to sell the property for a fixed fee of £1,000. paid in advance rather than taking a percentage of the final sale price. Homeowners paid the fee regardless of whether the property was sold.
In its early years, Purplebricks grew rapidly, fueled by a vibrant housing market, and made its founders and many early supporters millionaires when the company went public in 2015 on the London Stock Exchange with a floating rate of £240m.
Start… up became a household name thanks to millions spent on TV ads, and its market value peaked at £1.4bn in 2017 .
However, the situation began to deteriorate after a costly international expansion, including a launch in the US. The company also entered the rental market and became involved in a scandal over rental laws. This mistake ended up costing the company £9 million.
Finally, some sellers began to become frustrated with the upfront model as there was no guarantee the property would sell.
Purplebricks stock fell by 94% in the last 12 months alone.
< p>Sir Charles said: «The organization has become too big and cumbersome.»
«They were no different from traditional agents, and it became difficult for them to compete because their prices were too high.»
< Since the inception of Purplebricks, competing online real estate agents have been launched, including Yopa, which offers a no-sell, no-commission model.
Purplebricks first put itself up for sale in February and then expedited the sale process after giving a warning. may run out of cash.
Strike's £1 bailout offer was described by chief executive Helena Marston as a «solvent result» for the company, who said the deal ended a «complicated and uncertain time».
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Strike hopes to complete the Purplebricks takeover within the next two weeks and Ms Marston will step down as soon as the deal goes through. Sam Mitchell, chief executive of Strike, is expected to lead the combined business.
Mr Mitchell told The Telegraph earlier this week: “We're not going to dwell on Purplebricks' past. We have been eyeing the company for a long time. We haven't seen a brand explosion like Purplebricks, especially in the early days.»
Purplebricks will adopt the Strike business model once the deal closes, said Sir Charles.
Strike does not charge a commission, but charges for services. These include taking photos of the property, improving visibility on online portals like Rightmove and Zoopla, or inviting someone to come and view the property.
Strike started life as an online Housesimple real estate agent, but was renamed in 2020 when Sir Charles backed it through his investment company Freston Ventures.
Sir Charles hopes Purplebricks' the brand will help make strike business national. The startup's presence is currently limited to the north of England and the Midlands.
An online model where users can choose which parts of the service they need will be attractive to buyers and sellers at a time when high street agents are considered » the least reliable line of work — taking too much money for doing not enough»; Sir Charles said.
“This business will empower buyers and sellers,” he added. «The traditional real estate agency model is outdated and needs to be more efficient.»
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