Annual results announcement
End of year financial results
3rd - 9th February 2020
Hatched to close as Connells Group cites online model not commercially sustainable
Online estate agency Hatched will be closing to all new business with immediate effect, Connells Group announces today. The decision underlines Connells Group’s belief that the ‘online-only’/hybrid business model is fundamentally flawed and affirms the Group’s absolute commitment to its high street estate agency operation. Connells Group will seek to retain and redeploy all Hatched employees elsewhere within its business.
Hatched was acquired by Connells Group in 2015 to be run as an entirely separate enterprise to its core high street estate agency business. Since then, it has received a programme of investment including new head office premises and the doubling of its team of staff. In the same period, Connells Group has grown organically through cold start branch openings and acquiring further established high street estate agency businesses – such as 16 branch Rook Matthews Sayer and five branch Paul Dubberley - to extend its, now nearly 600, branch network further. The Group has also been at the forefront of adapting to changing digital technologies and consumer needs, developing new propositions as highlighted by its lead role in Fixflo and mio.
“Significant resource has been poured into Hatched over the last three years. We have thoroughly tested the hybrid model and have reached the conclusion that it does not produce a viable economic result – evidenced by the results of those operating in this sector – and with the cost of customer acquisition being one of the main barriers to being able to deliver a profitable return,” says David Plumtree, Connells Group Estate Agency Chief Executive.
“There is much talk of ‘disruption’ from hybrid estate agents, but from our experience we have found it significantly lacking when compared with the level of customer service, support and expertise that our high street operations provide. Ultimately, an upfront fee obligation – payable irrespective of whether a property sells or not – is not the right solution for the customer,” continues David. “As the UK’s largest and most profitable estate agent – completing more sales than any other UK estate agent - and with years of experience to draw upon, we are well equipped to take decisive action when, commercially, something simply doesn’t work.”
“Customers overwhelmingly demand our ‘full service’ and local expertise that blends traditional marketing techniques with the best technological advancements, but which never loses sight of core estate agency,” says David. “Face-to-face accessibility, intimate local market knowledge, a progressive digital offering, dedicated sales progression - and not just a focus on winning instructions - undisputedly works best for our customers and is becoming increasingly essential in a more challenging marketplace. Our decision serves the best interests of both our business and customers.”