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.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
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”.
-
50,000 power of attorney applications rejected – how to avoid common mistakesA freedom of information request shows that thousands of lasting power of attorney (LPA) applications are rejected due to errors. We explain how to avoid mistakes and reveal tips to make the process as straightforward as possible
-
Farmer fury – why are rural groups protesting against Autumn Budget inheritance tax changes?Farmers are protesting against restrictions on agricultural property relief – here is how the changes affect rural communities and land investors
-
Investing in a dangerous world: key takeaways from the MoneyWeek SummitIf you couldn’t get a ticket to MoneyWeek’s summit, here’s an overview of what you missed
-
DCC: a top-notch company going cheapDCC has a stellar long-term record and promising prospects. It has been unfairly marked down
-
How investors can use options to navigate a turbulent worldExplainer Options can be a useful solution for investors to protect and grow their wealth in volatile times.
-
Invest in Hilton Foods: a tasty UK food supplierHilton Foods is a keenly priced opportunity in an unglamorous sector
-
HSBC stocks jump – is its cost-cutting plan already paying off?HSBC's reorganisation has left questions unanswered, but otherwise the banking sector is in robust health
-
Lock in an 11% yield with SabreTips Sabre, a best-in-class company is undervalued due to low profits in the motor insurance industry. Should you invest?
-
Byju’s – the startling rise and fallIndia’s educational technology start-up Byju's attracted big-name backers and soared to vertiginous heights during Covid. It has now plummeted. What happened?
-
Shares in luxury goods companies take a hit – will they recover?Luxury goods companies have run into trouble, and the odds of a rapid recovery have receded. What next?
