Foxtons Becomes Self-Preservation Company as Home Sales Fall Off Cliff | Business


When a Foxtons employee looks in the mirror, the real estate agent can discern a thought that others cannot.

For them, the figure who smiles back is a young tycoon with irresistible outfits – confident that their sharp minds are about to win them another tasty commission. But many who are trying to buy a house in London might interpret this same picture as – how do I say that? – a little less heroic.

Given that Foxtons operates in London, which has largely been a seller’s market for decades, these divergent views of its front-line workers may be the inevitable function of supply and demand.

Yet the company’s perception of dynamic merchants may also be one of the company’s main selling points to customers (people who have homes for sale or rent). This may also be the reason why the company modeled its image on an arrogant young gang on the brand, deploying a fleet of branded Minis to travel the capital in a hat without shame in the 1969 film. Italian work.

Now, much like the fictional heroes of the film escaping from Turin, this team of immodest young Londoners must make their way through the seemingly insurmountable dead end of the Covid-19 economy – a theme that will be prominently displayed this week while Foxtons will hold its AGM.

The 2020 rally will of course be different from the norm – and not just because it will have to be conducted remotely. Surprisingly, the AGM seems unlikely to accommodate the usual waste on executive pay, which only shows how the coronavirus pandemic has shattered the doors of old certainties.

Shareholders will consider a new compensation policy – proposed by a new head of the compensation committee – while staff earning more than £ 40,000 per year have agreed to a 20% salary cut for at least April and May to save funds for crisis. The company has also been agile enough to secure funding as the pandemic struck – not only putting 750 workers on leave, but also raising £ 22 million in mid-April – which management plans to do. exceed even in the event of a prolonged blockage or a very slow recovery in the London property market.

Michael Caine and the cast of The Italian Job aboard their bus as he hangs over a cliff

“I have a good idea”: Michael Caine tries to save the day in The Italian Job (1969). Photography: Ronald Grant

Tough times for real estate agents seem to be a certainty, with rival Knight Frank predicting that Greater London will experience a 35% drop in sales from 82,000 last year to 53,000 this year. Foxtons himself said his commissions had dropped 47% in the first three weeks after the foreclosure, while he modeled a “worst case scenario” of 78% revenue decline between April and September this year.

However, while the general market is clearly in turmoil and Foxtons seems sure to be affected, it remains an important and relatively well funded player in what remains a very fragmented market. Small chains of real estate agents seem to face even more challenges, and many large rivals have yet to find escape routes.

Foxtons shares are, in effect, still a kick in the London housing market – which has been discolored since the Brexit vote – and therefore holding them (even at these low levels) is an act of faith. But there will come a time when another well-dressed salesperson, this time in town, will sniff a commission and try to persuade investors that the company is not about to fall off a cliff. “Wait a minute, guys,” he will inevitably say. “I have a great idea. “


Please enter your comment!
Please enter your name here