Countrywide PLC, CWD revenue drops, pressure from Online Estate agents Alison Platt CEO under pressure
Countrywide PLC, CWD after announcing disappointing annual trading ,admitted competition from online rivals, resulted in 3 per cent fall in Countrywide’s share price .
CWD has decided to roll out a new digital channel in the second quarter, easyProperty.com is marked the start of 2016 by launching land and new homes division.
Why sticking plasters, won't help, CountryWide plc
Online agencies such as Purplebricks, eMoov , HouseSimple ,easyProperty and others have been advertising heavily, online TV and radio platforms, with fixed prices lower than high street commission fee rivals; they currently command about 5 per cent of the market.
Alison Platt CEO Countrywide PLC Pie in Sky
The property market is keeping its head above the water , albeit faintly when seasonally adjusted sales data is combined.
That results in part from tighter lending conditions under the FCA Mortgage Market Review introduced in 2014, while government initiatives aiming to boost home ownership have mainly been targeted at newly built homes.
Countrywide, which runs high street brands including Hamptons International and Bairstow Eves, announced a new structure aimed at improving productivity, under Ms Platt, who joined over 18 months ago. It has also continued to buy up other retail businesses, acquiring 30 lettings agencies in 2015. at a time when retail is
"A pilot digital offering will be launched for three of the CountryWide Plc 50 high-street brands, enabling consumers to manage home moves online, including “self-serve” option, with pricing “more transparent than traditional high street commission based.
Jefferies investment bank on CountryWide Plc since restructuring [key staff departures] during 2015 the company has drawn a “tough first match” with a general election and wider economic uncertainties dampening the housing market.
Stark Online Contrast
In January Online estate agent purplebricks.com , was named in Bloomberg's inaugural Business Innovator's List,as one of the breakthrough businesses disrupting the way people live, work and think in the UK.
Its interim results released in January highlighted its growing success, in becoming fourth largest estate agent within 18 months of launch.
CEO Micheal Bruce of Purplebricks.com , said the group will continue to seek to deepen its coverage of the UK, using the GBP 25.0 million, raised from its listing on AIM, along with further investments in technology and marketing.
One of the biggest headaches , that news media [ particularly publications , associated with advertising accounts corporate high street agents ] seems to avoid reporting like the plague, the ever growing presence of online retail drift , and every growing data supporting UK consumer buyer behavior moving online.
Source Telegraph Mapped: are you paying your estate agent over the odds?
Commenting on the December 2015 ONS retail statistics David McCorquodale, KPMG head of retail said:
“With Online sales increasing by a whopping 8.2% compared to the 2014 festive period, it’s safe to say Christmas was an online affair for 2015.
“ Statistics also show that average store prices fell by 3.2% over the festive period compared to the previous year, highlighting the 18th consecutive month of year on year price drops – good news for consumers but falling prices don’t necessarily encourage consumers to shop if they feel they can wait for prices to drop further.
“The ease of signing in rather than walking in, combined with increasingly smooth running of logistics and fulfilment networks, is also good news for the consumer but the retailers will have to reconsider the role of the store and the store associate if they wish to reverse the drift to the online channel.”
The second biggest headache, is how countrywide will dispose of 500 + retail outlets over coming months , a gross drain on operating income and subsequently profit. There is no self service, a lap top desk top, in the comfort of your own home ,online is "where the consumer ,want to be" , not what the CountryWide thinks.
source CWD capital market presentation Novemebr 2015
the fate of movie retailer blockbuster and subsequent rise of Netflix
Eye brows were raised, late last year when UK corporate governance, was flouted by the out going chairman , coupled with the CEO trumpeting her appointment, to Tesco non executive board, despite the super market ombudsman debacle. Their new head of marketing , whose named also popped up, in the BBC staff pay off quagmire only a few years ago .
Last but not least the incoming chairman Peter Long may have plc experience But and its a big one , ruffling previous share holders, over salary and being voted off for board promotion don't bode well.
For a company to continually harp on about being consumer based, it seems strange that conscience is missing in a very media savvy environment.
The group said its financial outlook for 2016 was unchanged. It will hold its final dividend at 10p a share, without paying out a special dividend as it did last year. Total income was up 4% per cent to £733.7m.
Store retail vacancy rates across the country have increased from 5.4% in December 2008 to 14.1% in March 2013 (according to the Local Data Company), a rise of 161%. Without intervention, the vacancy rate can rise yet further, perhaps above 20%.
Stores are always closing - and reopening - but this time the pace of change is considerable and the total number of shops by 2018 is expected to fall by 22% over the next five years to 222,000.
Last year the Chancellor George Osborne and the Secretary for Business, Sajid Javid launched an ambitious action to increase competition in the UK economy - bringing down bills for families and firms while creating the conditions for businesses to thrive. The 25 page blueprint called ‘A better deal: Boosting competition to bring down bills for families and firms’ sets out concrete steps, the government was taking to secure rising living standards and create competitive business conditions for firms.- "Effective competition is crucial for dynamic markets that drive innovation and productivity as well as promoting consumer choice, resulting in better products and services at lower prices and putting more disposable income in the hands of working people."a section in the blue print titled, Injecting innovation into the process of home buying .Encouragement and endorsement of online business model, was also given [paragraphs 2.18 2.19 and 2.20].The Bank on England, has also outlined, how financial innovation and technology, can support the economy.
High Street Bank Closures
More and more people are using the telephone and Internet to complete their banking and branches are being used less often.
HSBC Branch Closure Impact Analysis
digital enablement is key” but online should be introduced to give vendors, buyers, landlords and tenants a choice, and not be the only available route.
Mobile and internet banking is now being used for transactions, worth nearly £1 billion a day, according to a major industry-wide report into consumer-friendly technology by the BBA and EY. 2014
Banking by smartphone , tablet and desktop has become the leading way customers manage their finances, as mobile banking overtakes branches and the internet as the most popular way to bank.
New research from CACI for the BBA shows that customers will use mobile devices to check their current accounts 895 million times in 2015, more than the 427 million branch interactions. By 2020 they are forecasting that customers will use their mobile to manage their current account 2.3 billion times – more than internet, branch and telephone banking put together.
The way we bank now !
The rise of internet only banks apps metro and atom bank is a is also a another challenge to the high street .
all systems go, clean sheet of paper, no legacy infrastructure or branches to worry about.Atom Bank CEO Mark Mullen.
"In spite of the Portas Pilots, the High Street will continue to suffer: around 41% of town centres will lose 27,638 stores in the next five years. http://www.retailresearch.org/
Mary planned to start a revolution in the world of estate agents, though thought that high street estate agents , let her down.
Portas, has gone on record saying she would create a capitalist environment, that understands the way people live their lives.’, so what better way than using online.
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