Retail Chatr

Below is an email sent to all Sperry Van Ness agents and employees this week outlining the closure of all Sperry Van Ness offices. I have to say that this sounds like Guardian Management, which acquired the SVN franchise rights in Southern California, Arizona and Oregon last year, had a web-based portal play in mind all along. It is pretty obvious when someone says they want to reduce the “brick and mortar” component of their business. Clearly these guys are trying to create an industry standard online brokerage management tool. My guess is that they have a subscription based model in mind. I don’t see why anyone would split fees just to use their web-based tools, although people have been doing it as SVN affiliates for some time now. Here is the email:

Dear Advisors and Staff,

With four months of ownership experience now behind us, we have completed our transition phase and have assessed the business. We’ve spent the recent months getting our arms around the business and stabilizing it. Much has been accomplished and we are very proud of our progress with this investment. Unfortunately, it has been quite challenging for many reasons.

While some of our experience to date is consistent with expectations, revenue production is significantly below projections and we must prepare for an extended period of financial challenges. As prudent investors and business owners, it is our intent to move forward with the changes and modifications necessary to create a sustainable business model.

Our immediate plans include a substantial reduction in the “brick and mortar” component of our business. This is among our largest, ongoing fixed costs. Fundamentally, we hope to use today’s new technology to provide a high degree of mobility and efficiency for our Advisors.

Effective immediately, we are consolidating all of our Southern California offices to the West Los Angeles location. All other California offices will be permanently closed effective January 19, 2009 at 5 p.m. David Rich will serve as our Los Angeles Managing Director (310-500-1239 or richd@svn.com). All California-based Advisors will report to David effective January 17. You are directed to continue processing all transaction activity as usual through David as your supervising broker. We are prepared and committed to ensure a smooth transition. All California office files have or are being transferred to the Los Angeles office. If you are presently working as a Satellite Advisor, there will be no change in service. The Phoenix office will remain open and Kevin Hanford will continue as our Managing Director.

We value all of our Advisors and wish to offer you an incentive to convert your existing contracts and continue with us under a Satellite Agreement. A number of our agents already operate under this type of agreement, in which you are responsible for your own office and related support. The Sperry Van Ness tools and technology will remain the same. Guardian will offer Virtual Private Network (VPN) access to all of our remote users and Satellite team members. Please contact either David Rich or Bob Osbrink for additional information. Please find the attached information pertaining to your Information Technology future access.

Our plans for 2009 include a continued effort to improve the technology along with other areas of support wherever possible. As the largest SVN franchisee, we’ve been working with the Franchisor for several months to improve various aspects of OTS and On Line Publisher. Much progress has been made here too, and we expect to see the improved software rolling out soon.

As we evolve our business to include this “virtual” component and consolidate our California offices, staff reductions are also being made. I would like to acknowledge and thank the management team members: Irene Ryn, Steve Malley, Charles Currey, Jeff Albee and Damon Wyler. They have all performed very well for us during this start up phase and we will miss working with them. I have extended invitations for each to continue with us as senior brokers. We also wish to acknowledge Bob Osbrink for his capable leadership and valuable contributions during this transition phase. His guidance and recommendations have been instrumental in setting the future course of our business. Bob and Cindy will continue with us through our restructuring transition process.

I appreciate your patience as we work through this next phase. I also believe this is a time where plenty of opportunities exist for aggressive, creative and smart people to succeed. Please know that we are committed to supporting and promoting your success with us.

Best wishes for a safe and prosperous 2009.

Thomas Brenneke
President
Guardian Management LLC
710 NW 14th Avenue | Second Floor | Portland, Oregon 97209
T 503.802.3613 | F 503.802.3655

www.guardianmanagementllc.com

Interesting times.