High street stalwart falls victim to slowdown

Published 16th Jun 2008

The crisis in the housing market has claimed its first major high street victim. Humberts the beleaguered national estate agency, was on Wednesday finally forced into administration after struggling under heavy losses for several months.

The 165-year-old company placed its trading subsidiaries into a “pre-pack” administration. The majority of the offices and the brand name – it is one of the oldest fixtures on the country’s high streets – were immediately bought by Middle Eastern investment company Mercantile Group for £3.2m ($6.3m).

John McLean, executive chairman of Humberts, warned that the estate agency market had not yet seen the worst: “Life in estate agency has been very difficult. We were bleeding – haemorrhaging – money since Christmas and we haven’t seen the bottom.”

The decision puts an end to months of speculation about a rescue package for the business, with Lord Marland, the former Conservative party chairman, at one stage linked to a takeover.

Humberts’ shares have been suspended since mid-May, having lost 94 per cent during the past 12 months.
Property entrepreneur Vincent Tchenguiz, a major shareholder, was also interested, but the company was finally sold to one of his business associates. Mercantile Group owns half the upmarket estate agency chain Chesterton with Mr Tchenguiz.

During the housing boom, Humberts acquired a succession of smaller rivals to become a full-service chain focused mainly on London and the south-west.

But the company has been making a loss every month since the beginning of the year as the housing market turned. It has been selling parts of its business, mostly to the original management, over the past few weeks.

Mercantile Group has acquired 34 offices and 10 franchisee branches from the administrators. It also bought assets of the company’s London-based subsidiaries Farleys and Wellingtons estate agencies, which are going concerns.
The sales leave a number of branches of Humberts still in administration, all of which are based in North Somerset. Mr McLean said these were making substantial losses.

Source: ' Financial Times Ltd '

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