Online estate agent Purplebricks would pull its business out of the United States and will focus on expanding roots in Britain, said the company last week, after acknowledging that its approach to expand internationally was too aggressive.
Company’s revenue from the United States account for only 2% of its total revenue and the decision of quitting the U.S. market came after the company in May decided to pull out of Australia.
The decision also came following the quit of company’s founder and CEO Michael Bruce in May after admitting that company had compromised on its standards to rapidly expand overseas.
Founded in 2014, Purplebricks entered in the United States in 2017 with a confidence of showing performance it showed in Britain, where it quickly became a market leader due to its faster growth pace. But in May this year, Purplebricks made an apology to its shareholders for disappointing performance in the United States and said that it had cut marketing as well as other expenses and was reviewing whether it can continue operating in the United States with significantly diminishing business.
Vic Darvey, Purplebricks’ Chief Executive Officer, told Reuters that company had decided last week to either shut or sell the business in the United States and costs to exit are expected to be around 4 million pounds ($5 million).
Because of the people involved in company’s U.S. business, exiting is a difficult decision but is positive from leadership point of view, Darvey said.
Purplebricks is starting cash generation strategy this year, and as it the largest estate agent in the UK, it has set a goal to bring its market share in the country to 10% which is currently 4%, he added.
The target set by Purplebricks was considered as realistic in the medium term by CMC Markets analyst David Madden.
