Too good to be true.
Widely reviled Highly successful estate agency Foxton’s has breached its banking covenants. BC Partners – the private equity firm that bought the company at the peak of the market gave a press conference yesterday. From Bloomberg (emphasis ours):
Jan. 8 (Bloomberg) — BC Partners Ltd. said its 390 million-pound ($593 million) takeover of Foxtons Ltd., the British chain of real estate agents, was a “mistake with hindsight” after the London house price bubble burst. Sales of homes in the capital have slowed by as much as 70 percent since the buyout firm acquired London-based Foxtons in May 2007, BC managing partner Andrew Newington said at a briefing in London today. The buyout firm had anticipated a 30 percent slowdown when it planned the takeover.
“We made the wrong call,” Newington said. “The market decline was way too steep and we didn’t anticipate it. We were wrong.” Foxtons has missed its interest-cover and debt-to-earnings targets, he added. BC Partners is in talks with the company’s lenders, Mizuho and Bank of America Corp., and may invest more cash into the real estate chain “in the right circumstances,” Newington said. BC Partners used about 260 million pounds of loans to finance the acquisition.
The estate agent is still profitable, as growth in its letting business offsets a slowdown in property sales, the company said. Lettings now account for about half of Foxton’s revenue, compared with 20 percent. The company, which is known for its fleet of green Mini Coopers used by employees to show houses and apartments, has about 40 branches in London and Surrey.
There is something supremely ironic about Foxtons — a company whose money in great part came from mercenarily squeezing tenants dry through ridiculous payments, charges and fines — finally being done in for breaching clauses in a contract all of its own.
From Bryony Gordon at the Telegraph:
I don’t, as a rule, hate that many things. Hate requires far too much effort. What is the point of hating something when you can feel apathetic instead? I have work to do, bills to pay, people to see; I don’t have the time to hate.
But sometimes, something comes along that is so easy to hate it would take more of an effort not to hate it, and that thing is Foxtons.
How much do I hate Foxtons? Let me count the ways. I hate them because, when you are stupid enough to view a flat through them, as I was a few months ago, they then bombard you with phone calls to tell you about another property you will really like, at which point you say: “Yes, I probably would really like this flat in Mayfair, but at £450 a week it is not really within my budget, now would you kindly please stop calling me?”
Yet three minutes later they’re back again, with a studio in Chelsea for £500 a week and they don’t stop until you change your number or have a nervous breakdown on the phone to them.
I hate them because, in a misguided effort to be cool, they drive around in stupid, branded, souped-up Mini Coopers and work out of offices that could easily be mistaken for bars, which is apt, because you’d have to be several sheets to the wind to even think about going into one.
Disclaimer: This reporter in no way has any grudge against Foxtons after the eight-month legal tussel in which they attempted to steal my tenancy deposit to pay for their own incompetence.
Related links:
Kool and the Gang: Celebration – Youtube
Sale of the Century – FT
We hate Foxtons – Wehatefoxtons.com