Online estate agent Purplebricks has been sold to rival agent Strike for £1. The acquisition means 750 staff are at risk of redundancy.
Founded in 2012 by Michael Bruce, Kenny Bruce and David Shepherd, Purplebricks targeted the market with their cost-effective properties and low-cost business models. However in February, after a string of international losses and numerous profit warnings the company decided to put itself up for sale.
According to Purplebricks, the fire-sale to the Charles Dunstone-backed estate agent Strike was ‘disappointing’ but the company insisted no better offers emerged during the sale process.
Strike will reportedly embark on a cost-cutting drive which will include “reducing the employee base” at Purplebricks.
“While this will require comprehensive planning, Strike has indicated it would like to complete this planning and initiate a redundancy consultation process, with the company’s assistance, that would likely involve all of the company’s employees as soon as practicable and possibly prior to completion [of the deal],” a spokesperson for Purplebricks said.
“Strike has however assured the board that its firm intention is to grow the business, which will require continued employee support and that any employees affected by redundancy will be treated fairly and equitably, consistent with Strike’s culture of respect.”
CEO of Strike, Sam Mitchell, said he has ‘never seen a brand burst onto the scene and disrupt the market like Purplebricks’ and is looking forward to ‘harnessing its original entrepreneurial spirit’ in years to come.
He said: “By combining the key strengths of Purplebricks and Strike, we will develop a stronger technology-led model that gives customers a much better experience at a much lower cost. We look forward to working with the Purplebricks team as we build a new force in the property industry.”