Soho House IPO: celebrities’ hangout hits the market

Soho House has filed for an initial public offering (IPO) in New York that is “expected to value the celebrity members’ club chain at more than $3bn”, says Dominic Walsh in The Times. The group will list under the name of the Membership Collective Group, reflecting the “variety of venues and services” it now offers.

These not only include the “twenty-eight Soho House members’ clubs and nine Soho Works workspaces”, but also “The Ned hotel and members’ club in London, the Scorpios beach club in Mykonos and Soho Home, an online platform that sells the products used in its properties”. Lockdowns “hit the company hard”, say Jack Sidders and Crystal Tse on Bloomberg. Sales fell from $642m in 2019 to $384m in 2020. While the firm has never been able to turn a profit, losses rose to $235m in 2020.

These losses have forced the company to borrow more money, with debt reaching $826m in April. Part of the money that it raises from any offering will be used to pay borrowings down. The group’s unprofitability is due chiefly to the frenetic pace of expansion, with the number of members growing by 16% each year between 2016 and 2020, say Alice Hancock and Matthew Rocco in the Financial Times.

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But with a waiting list of 48,000 people at the start of 2021, the club could now benefit from the rise of “digital nomads” who increasingly want to “work from anywhere” rather than return to the office. And the shares should profit from investors’ enthusiasm for travel and leisure stocks, which “has already benefited the likes of Hilton, Hyatt and Airbnb”.