Dubai-based property agency S&K Estate Agents, which traded as Smith & Ken, has confirmed that it has filed for bankruptcy.
In a statement, the company said that all 80 staff within the company in both its Dubai and LA offices have lost their jobs and that a liquidator has been appointed to handle the firm’s affairs.
A statement from the company’s shareholders said: “Unfortunately we have had no other choice but to file bankruptcy and hand over accounts and any remaining income to our liquidator.
“Simply put, the revenue being generated by the business drastically reduced over the first half of 2015, without enough income to cover operational costs.
“Additional support, advertising, incentives and training had been provided to existing and new agents to try and aid their growth and development to increase sales.”
It said that “as a last resort” to find more experienced agents, it had embarked on a heavy recruitment drive during the first half of 2015, using local agents in Dubai and the UK.
“However, the fruits of this process did not transpire in time to save the organisation,” it said. “Poor service levels provided by the brokerage led to a number of complaints from clients, which deterred repeat business opportunities and created a poor reputation for the company, which is the graveyard for any serviced-based company.”
It added that current market conditions in Dubai were a factor, with the number and value of property transactions falling, and costs such as advertising, licensing and visas mounting.
“After years of profitability, we believe the brokerage market is saturated - too many agencies without the population and investment to match. Also, many smaller competitors dropping fees to one per cent per transaction to win the business has made it increasingly difficult for larger brokerages to compete.”
On Sunday, The National reported that Dubai Police were investigating a vandalism incident at the company’s offices at Concord Tower in Dubai Media City following the company’s closure last week.
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