Soho House's push for an initial public offering puts a lot of stock around the idea that more customers want some degree of exclusivity following the pandemic.
The parent company behind Soho House, the global chain of members-only clubs, put months of speculation to rest Monday by officially filing plans to go public.
The company plans to list on the New York Stock Exchange under the name Membership Collective Group and symbol “MCG,” according to a filing with the U.S. Securities and Exchange Commission. While the filing indicates plans to raise as much as $100 million in the process, that figure is typically a placeholder on initial public offerings. There was no mention of how many shares would be offered.
Soho House founder Nick Jones indicated the IPO would help with further growth for the company, which has 30 clubs around the world, according to the company website.
“After 25 years, we now find ourselves in the position of being a global platform for our memberships. I’m incredibly proud of how we’ve grown memberships for social, work, and retail under Soho House, and have evolved our platforms to create new opportunities for our existing members, as well as potential new members,” Jones wrote in a letter included in the SEC filing. “We will continue to open physical Houses — expanding our footprint across Europe, the Americas, Asia and Africa — and launch new types of membership that can be scaled globally.”
Physical Soho Houses are the bread-and-butter of the company. There were more than 119,000 members across various MCG platforms, as of early April. But more than 111,000 of those were part of Soho House, where annual memberships run at about $3,500 to access the entire global network. MCG plans to have 46 Soho Houses in operation by the end of 2023, with a long-term growth target of adding three to five properties each year.
There are also “Cities Without Houses” memberships for those who live in cities without a physical Soho House but can access one of the clubs whenever they travel to a city where one is located. There’s also a Soho Works coworking concept, the Scorpios beach club in Greece, and the Ned membership club in London.
Other membership alternatives include Soho Friends, a type of membership that enables access to some — but not all — aspects of a Soho House like bedroom use and discounts to restaurants. There’s also a subscription platform for the company’s home retail brand.
There are also plans for a digital-only platform, Soho House Digital Membership, expected to launch later this year.
“Offering a new digital-only option will make our membership truly global and diverse, enabling the best creatives from all over the world to make meaningful connections with each other: from an established producer in Ghana to a 22-year old scriptwriter in West Hollywood, or the founder of an emerging tech start-up in Jakarta to a digital designer in Beirut,” Jones wrote.
Soho House was somewhat of a resilient hospitality entity despite the pandemic leading to temporarily suspended operations at many of its clubs and layoffs of 1,000 staffers. The company maintained a 92 percent membership retention rate for the duration of 2020, according to the filing. There was even a global 48,000-person wait list for membership at the beginning of this year.
But Soho House has never posted a profit, even before the pandemic. The company lost $235 million in 2020, $128 million in 2019, and $90 million in 2018. The company lost $93 million in the first quarter of this year.
The company had an $848 million deficit at the beginning of April, and the prospectus notes much of this stems from expenses involved in opening new clubs and launching complementary businesses.
Chasing Changing Customer Tastes
This isn’t Soho House’s first attempt at an IPO: The London-based members club ended plans to go public in 2018, when the company was then valued at $2 billion.
This latest advancement toward going public comes as summer leisure travel demand is expected to rapidly accelerate in many parts of the world. But analysts expect additional demand toward more exclusive entities like a Soho House.
“More and more companies and groups are very eager to explore and expand the membership concept. It’s all been fueled by the pandemic and how that has impacted how we live, work, and play,” Gilda Perez-Alvarado, global CEO of JLL Hotels & Hospitality, told Skift earlier this year. “Maybe you travel to a certain city where there’s an exclusive space you can stay that’s giving you a more residential and very personal approach service. That’s the winning formula going forward.”
Soho House is banking on this idea.
“We believe that these trends will only accelerate, and that the freedom to be able to choose where to live and work—particularly in light of the COVID-19 pandemic—will likely have a significant impact on our target market,” the company included in the prospectus. “We believe this will create an even greater demand for curated communities that can grow and thrive in a more deliberate environment.”
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Photo credit: The parent company of Soho House (pictured: Soho Beach House in Miami) filed plans Monday for an initial public offering on the New York Stock Exchange. Ines Hegedus-Garcia / Flickr