PurpleBricks: When a solid brand isn't enough

Purplebricks is having a year to forget. Last week, the online estate agent’s shares crashed as it announced that its cash reserves were at risk and it was in talks over a possible sale to Strike – a major rival in the space.

While Purplebricks is clearly ailing, it’s also (according to YouGov BrandIndex data), one of the more well-liked brands in the UK property market. Overall Impression scores, which measure general positive and negative sentiment, fell from 9.7 to 7.0 between 1 January and 14 May 2023 (-2.7): a dip, but one that still leaves it comfortably ahead of the average for the sector – which is at 2.9.

Value for Money scores are also comfortably ahead of the sector: though they’ve seen a dip since January (falling from 12.5 to 10.6 – a decline of 1.9 points), they remain well ahead of the sector average of 0.6.

Purplebricks underperformed the wider property industry in two key areas: Quality scores have deteriorated from 5.7 to 0.9 over the course of 2023 so far (-4.8) – compared to an average of 2.1 across all brands in the sector. The decline suggests that negative headlines about its finances may have caught up to it. Similarly, Reputation scores (which measure whether consumers would be proud or embarrassed to work for a brand) fell from 1.7 to 0.9 (-0.8), while scores for all brands we track in the property sector average out at 2.4.

But while Index scores (which measure overall brand health) have dipped from 6.2 to 4.1 (-2.1), they remain more than twice that of the average property brand (1.9). Looking again at Impressions, Purplebricks is the most-liked estate agent (when disregarding industry portals such as first-ranked Rightmove and second-ranked Zoopla): ahead of any bricks-and-mortar estate agent.

So the company might be a savvy acquisition for Strike if the deal goes through: for all its troubles, it’s a well-recognised, well-liked brand. But Purplebricks could also, in its way, serve as a cautionary tale. How far can a well-liked brand take you if your financials and fundamentals aren’t in order?

This article originally appeared in City A.M.