Online estate agency appoints administrators from James Cowper Kreston
Professional services firm James Cowper Kreston has been installed administrator of online estate agency Emoov. The company was making a loss over a sustained period and had placed itself up for sale in November, but in the absence of a buyer has fallen into administration, threatening more than 100 jobs and leaving thousands of customers in limbo.
Emoov was established by Russell Quirk in 2010. The firm operated a hybrid estate agency, combining online client service and property listings supported by personal help and advice from local agents, but without the requirement of a high street presence. While ecommerce is often touted as being the future successor of bricks-and-mortar trade, Emoov’s agile operational model is not the only one to encounter issues in the UK real estate market.
Online agents have grown rapidly by undercutting high street rivals but have rarely received positive feedback from home sellers, while traditional player Connells closed its digital arm Hatched in September 2018, stating its online business model had proven to be “fundamentally flawed.” At the same time, market leader Purplebricks remains profitable in the UK, but has never turned a pre-tax profit due to investments in overseas expansion.
Expansion investment seems to have played a role in the demise of Emoov as well. The company charged home sellers a fixed up-front fee rather than the commission levied by traditional estate agents, and in early 2018 the firm Emoov engineered a £100 million three-way merger with rivals Urban.co.uk and Tepilo, the online agency established by Channel 4 television presenter, Sarah Beeny. However, the attempt to boost revenues inorganically seems merely to have consolidated pressures on the loss-making Emoov, which was forced to place itself on the market in November after running into cash flow troubles.
Unfortunately, attempts to find one or more buyers for the Emoov and Tepilo businesses, ahead of administration, proved inconclusive. Now, Emoov has appointed Peter Whalley and Sandra Mundy of James Cowper Kreston as joint administrators. As a number of prospective buyers have indicated an interest in purchasing the client property listings, the administrators will be exploring the transfer of these to other providers as a priority, in order to minimise disruption to the companies’ client homeowners.
Emoov’s site currently has 5,000 properties listed for sale, or sold subject to contract. According to James Cowper Kreston, around 80% of these listings have been paid for upfront, meaning many customers risk being left out of pocket if a sale can't be arranged – or if it is but existing terms aren't honoured. The administrators say they will be writing to creditors to invite them to submit claims for cash they are owed, though if customers do register as a creditor they are likely to be far down the list to be paid.
At the same time, all 140 staff at Emoov are expected to lose their jobs. An email to staff from Emoov founder and CEO Russell Quirk leaked by a source at the firm to online news outlet EAR lamented that all options to preserve the firm in its current state had been exhausted.
Quirk expanded, "Regretfully and despite my significant endeavours over this weekend to achieve such, the prospective purchasers that have been in the wings have not come through with viable offers to acquire the Emoov business. In good faith, my absolute quest over the past few weeks has been to secure the future of Emoov under a new owner in order that staff and customers would have continuity and certainty. Sadly, that is not now to be… I held a call with Emoov board members where it was agreed to appoint James Cowper Kreston as administrators. Once this intention is filed with the court later today they will take charge of the affairs of the company and its staff, customers and creditors and will work to secure an ultimate buyer.”
Related: Brexit impacts real estate as investors favour Germany over UK.
