The boss of Connells Group, executive chairman Stephen Shipperley, this week marks his 40th year in the industry – all them spent at Connells, which he joined straight from school as a trainee negotiator.
Here, in a special and remarkably wide-ranging interview with EYE, one of the most respected figures in today’s industry shares his successes, challenges – and his regrets.
And yes, they include not holding on to Rightmove shares which were sold off at rock bottom – with today marking the first time that Shipperley has broken his silence on the bombshell deal few could understand at the time.
But there are certainly no regrets about joining an industry about which his passion burns as much as ever.
The 17-year-old Stephen Shipperley nurtured no ambition to be an estate agent – for one simple reason: “Until I went to the interview at Connells, I didn’t know what an estate agent did.”
Shipperley says that, much to his father’s disappointment, he decided against university, as he wanted a career and to start earning money.
“I had six interviews lined up including a role at Lloyds Bank on their management programme which offered three times the salary than at Connells, but after just half an hour into my Connells interview I knew that estate agency was for me.”
His first job was at the Aylesbury branch in Buckinghamshire, from where he sold his first property, a three-bed semi for £9,750 and which today would go for £250,000.
Back in 1977, there were 20 Connells branches and some 150 staff, primarily in the northern home counties.
The ethos of the company was to ‘catch people on the way up’ and age was no barrier: at 21 Shipperley became a branch manager at High Wycombe, an experience he describes as fantastic and frightening in equal measures.
Today, the group has over 7,000 staff and nearly 600 nationwide branches, but the meritocratic culture is the same – encouraging talent regardless of age, gender or background.
Shipperley says: “Our people are our most important asset and who make the difference to our business and our performance.
“We invest heavily in our staff and their career development, helping them to progress and always looking to promote from within.”
Asked what his own role involves, he says that ‘group executive chairman’ is “just a title”.
“I am part of a very successful senior management team which, when you put it together with our very effective local and middle management teams, creates a winning formula.
“Essentially, our senior team makes sure we’re making the right decisions and avoiding the bad decisions – oh – and play golf and entertain clients and have fun.”
Shipperley has of course seen huge changes in the last four decades, with improved technology bringing speed and efficiency.
“One of my first jobs was to produce property details on a temperamental old printer.
“It took two days to get photos back from the printers, but now digital images are instantly available. We could wait a week to place an advert, but now we upload to the internet the same day.
“Today’s operation is much slicker in comparison and we are massively more productive due to technological advancements.
“The best agents, however, are those that never lose sight of being people focused and keep the human contact, despite how much easier technology has made our jobs. Still can’t beat a phone call to inspire some action.”
Online v High Street
Connells Group now has an online agency business, Hatched – what does the business plan for it?
“Our plans are the same as for any other business that we have acquired – to improve it and make it profitable.
“Hatched gives us a window into the world of a different business model and is by no means a prelude to the demise of the high street agent.
“Hatched allows further research and development on our side, offering a different proposition to a different market. It also allows us to extend our market leading expertise to even more customers and grow our network in areas that our existing branch network does not currently cover.
“But I re-emphasise that we are strong believers in high street estate agency and we are continuing to open new branches.”
Estate agency business run by estate agents
Connells is consistently profitable, and Shipperley says that there is “a clear and unambiguous focus on profit throughout the business”.
It pays off – in 2016, Connells made profits of £73.4m, up 17.4% on the previous year.
While staff are rewarded on profitability there are other measures of success, including customer satisfaction, staff satisfaction and market share.
Shipperley also says that the firm is prepared to take risks – but calculated ones, not punts in the dark. “We’re not always right, but we quickly learn from our mistakes,” he said.
He refuses to be drawn on Countrywide whose woes are well chronicled and which is run by someone not from an estate agency background, saying Connells would never comment on another business.
However, he does make the point: “Connells Group is an estate agency business run by estate agents who have a huge amount of experience and have seen all shades of the property market – something unique in today’s industry.
“We are people-focused, driven, enterprising, meritocratic, innovative and a tad arrogant!”
Like other corporates keen to use their estate agency business as a distribution network for mortgages (Connells’ parent company is the Skipton building society), Connells was a latecomer to lettings.
In September 2003 it bought Sequence and since then has been playing ‘catch up’.
“There has been a huge expansion of our lettings business over the last five years.
“This has seen some snapping up of lettings books but the main drive has been on cold start openings and ensuring we have a lettings offering in all our existing branches.”
He does however worry about the forthcoming ban on fees and “the continuous assault on private landlords, and how agents will develop and refine their services to accommodate this”.
High Street agents must ‘champion themselves’
Sales, says Shipperley, has its own challenges.
First, he says agents will have to come to terms with lower transactions as being the new norm
Second, high street agents must champion their offering against other businesses that simply charge to list.
“These businesses don’t do anything that we don’t already do, but ‘traditional agents’ like us need to get the message out about our value for money, that customers pay for good results, that there’s no sale, no fee, and we can achieve faster sales and ultimately a better sale price for their home.
“Ultimately, we need to convince customers that paying a higher fee is worth the investment and ends up good value for money.”
What is the single thing he would change within the industry?
“To increase professionalism.
“There are many firms doing lots of great things but there are also many that fall very short of certain standards.
“Regulation has compelled the industry to address some of these issues, but I do feel that there are standards that we should all be performing as part of the basics of good estate agency practice.
“I think that if professionalism and competence within our industry is increased, then estate agency would be positioned as more of a ‘go-to’ profession for school and university leavers and one that doesn’t play second fiddle to accountancy, law etc.
“A career in estate agency should be just as aspirational.”
Highlights over his long career have been many, and include being made partner in 1983; recruiting David Livesey in 1990 (“despite his dodgy moustache at that time”) – he is now group chief executive; the 1996 management buy-out backed by Skipton Building Society; and the acquisition of Sequence, which he says was an absolute game changer, taking the business from 150 to 450 branches overnight.
Have there been any low moments or regrets in the last 40 years?
Mistakes – well, there’ve been a few
Connells has, he says, bought some poorly performing companies believing the group could bring them up for scratch – but then realising they were poor for a reason. The firm now buys only good quality businesses.
EYE told him we didn’t dare ask about the sale of the Rightmove shares – but he answered anyway, having always been silent until this interview.
Connells still had an 18% stake in Rightmove, having sold off part of its holding when the portal launched on the stock market, but sold the lot in December 2008 at 155p per share, raising some £32.55m.
It might have seemed the right thing to do, in the midst of a market crash where Rightmove shares had themselves crashed from a peak of 540p in February that year.
However, had Connells hung on, each 155p share today would be worth over £40 (as of yesterday), and an 18% shareholding in a firm capitalised at £3.8bn . . . well, it hardly bears thinking about.
Shipperley is sanguine about it: “Rightmove at every level and by any measure has been a spectacular success.
“For Connells, this was a spectacular investment – well over £100m of profit from an initial £3m initial investment.
“But, we should have held on to our last batch of shares for longer and we would have done better. So there – I have said it!
“In mitigation, at the time (the 2008/09 crisis), our parent company needed the cash and so we sold.
“It just goes to prove that you can’t get everything right and we have had the odd stumble along the way.”
Not the retiring type
A final question: Is he old enough to retire yet, EYE asked somewhat cheekily.
“Of course not – I’m 58, not 78. I love what I do and have no plans to retire. Within Connells Group, age is irrelevant. It’s what you bring to a role that counts.”