Founder and Chief Executive Officer (CEO) of Purplebricks, Michael Bruce, has taken the decision to resign from the real estate agent. This announcement was made with immediate effect, as the firm has admitted it has made a series of strategic errors. This, in addition to the firm’s decision to exit Australia has led to the plummeting of the company’s shares over the past few months. Additionally, the online real estate agent has revealed that its US operations are about to undergo a period of review and focus after the Australian arm is officially shut down.
Vic Darvey has been named as Bruce’s replacement. Darvey was formerly Purplebricks’ Chief Operating Officer (COO). Paul Pindar, chairman of Purplebricks, displayed gratitude as he expressed a heartfelt thanks to Bruce for his contribution. However, Pindar was quick to point out that the firm’s decisions over the past year were erroneous.
In a statement given, Pindar indicated awareness of the horrendous performance over the last year, and he issued an apology to shareholders. He stated that the biggest mistakes were the attempt at a geographical expansion at a level that was too rapid, and the fact that the capital allocation decisions that were made were less than optimal.
Purplebricks expressed sentiments that the operational conditions in Australia were challenging. This resulted in an insufficient ROI and so continued operation in the continent cannot be feasibly justified. Therefore, the decision has been taken to cease operations there in an orderly fashion.
On the US front, the company has indicated that its marketing efforts are not receiving the level of response that was expected. This has led to the inclination that projected revenue targets are likely to be missed.
Analysts have stated that the firm now needs to raise fresh cash, and that it should abandon its aspirations of international expansion.