Purplebricks Group PLC (AIM:PURP), the floundering company that once sought to transform the UK estate agency market, said its chief executive officer, Vic Darvey, is quitting.
Darvey, who took over as chief executive in May 2019 just four months after joining the company as chief operating officer, will leave at the end of the month to be replaced by Helena Marston, who is currently the group’s chief operating officer.
The decision to step down from the role was said to be for personal reasons.
Darvey oversaw the exit from the group’s loss-making international operations and the implementation of a new operating for the UK business.
“He has guided the business during a period of considerable change and challenge, including building a strengthened senior leadership team focused on our tech-led growth. We understand and respect his personal reasons for leaving and wish him the very best in the future,” said Paul Pindar, the chair of Purplebricks.
Under Darvey’s watch, the share price of Purplebricks has slumped from around 100p to 14.5p and the days when the stock was seen as a go-go glamour tech stock to match those usually quoted on the US’s NASDAQ exchange seem a long time ago.
The group is currently facing a class-action lawsuit from over 100 former agents who believe they were entitled to the benefits given to permanent employees, despite being classed as self-employed.
At the end of January, the AIM-listed firm reported a £20.2mln loss in the six months to October 2021 after having to increase costs as a result of making several sales staff permanent employees.
In December, it was reported that Section 21 eviction notice errors by the online estate agent could lead to tenants claiming nine times their deposit as compensation. Purplebricks, which said it immediately stopped serving new Section 21 notices as soon as the mistake was identified, acknowledged the problem, calculating a potential risk in the range of between £2mln and £9mln.
Red flags were perhaps raised for some investors when the company’s chief financial officer, Andy Botha, stepped down in October of last year having only joined in April 2020.
Although things could hardly be said to have gone swimmingly under Darvey he was to borrow a phrase from football parlance, given a hospital pass when he took over.
In keeping with many other UK companies drunk on success in their home market, Purplebricks elected (under previous management) to take its hybrid online/offline model to the US, where the estate agency market is very different.
It did not take Darvey long to realise that the company would be throwing good money after bad trying to make a go of it in the US and closed the US operations at the end of 2019. The decision was taken just a few months after a similar decision to withdraw from Australia. An exit from Canada subsequently followed the retreat from the US.
Purplebricks officially launched in 2014 and quickly became the leading online estate agency in the UK after investing hugely in marketing, including expensive TV adverts.
It differentiated itself from competitors by charging a fixed fee for its service, rather than charging for services used on a “pick & mix” basis, which was the model favoured by most of its rivals.
The “hybrid” part of the model basically referred to having a local estate agent who would meet the vendor face-to-face, thus the setting company apart from purely online operations where business would be conducted over the phone.
At the peak of its success, the company was valued at more than £1.5bn; now, the whole kit & caboodle can be bought for £45mln with little prospect of any putative buyer being gazumped.