Purplebricks has revealed that it may either sell or close its US business as it withdraws from North America, citing a lack of management time and cash available to achieve the revenue growth it had hoped for over the pond, and mounting losses.

CEO Vic Darvey (pictured, below) says that all of the seven states it has launched into including the New York tri-state area, California, Arizona, Nevada and Florida have all required huge resources to build brand awareness and that, following a strategic review and consideration of alternative business models, the decision to withdraw was made.

The exit from the US is also about costs. Purplebricks’ year-end report reveals that although the company increased its turnover last year to £11.3 million in the US from £1.6 million the year before, huge marketing costs of £24.5 million and other costs of £16 million pushed the operation deeper into the red.

US losses

During its most recent financial year the US arm lost £34.1 million, more than double the losses in the previous year.

Its cost per sale in the US was also unsustainable. Purplebricks spent £8,917 gaining each instruction, which earned it £3,956 in revenue.

“I would like to take this opportunity to thank all of our incredibly talented people across all our markets in what has been a challenging year – from the external macro environment to a number of significant internal changes,” he says.

“My thanks in particular to our colleagues in Australia and the US, who have remained highly professional and, without exception, always focused on delivering great outcomes for our customers throughout a very difficult period for the business.”