After a failed U.S. expansion, real estate brokerage Purplebricks is still growing and remains profitable, but is facing headwinds in a soft property market
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Purplebricks’ impressive growth in the U.K. market continues, albeit at a slowing pace. Overall instructions are up again, but only 9% compared to the previous year., “Real estate is very fragmented, there are relatively low barriers to entry to get into the business of selling houses, the products are undifferentiated and there’s no customer loyalty. That leads to natural fragmentation.”
The decline is driven by a drop in revenue. Compared to the first six months of Purplebricks’ financial year, marketing expenses remained steady while revenue dropped £6.5 million. With a soft property market in the U.K., at least partially driven by the uncertainty around Brexit, it is becoming more difficult and expensive for Purplebricks to acquire customers.
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