A favorite haunt of celebrities and creatives for a quarter of a century, the Soho House chain of private clubs has always been super stylish.
In the 1990s, it was the epitome of Cool Britannia. More recently, Harry and Meghan went on their first date to the Dean Street mansion.
Now, under the weakly socialist-sounding name of the Membership Collective Group, the parent company has embraced the fashion of floating in the stock market.
Soho House chief Nick Jones (pictured), describes the club’s forthcoming listing of the private members’ club chain as ‘nervous and exciting in equal measure’
The price per share is between $2.8 billion and $3.2 billion (£2 billion to £2.3 billion) or $14 to $16 (£10.10 to £11.54). More details will be announced today.
For a company built around members flocking into its clubs, it takes steady audacity to go public during a pandemic.
Nick Jones, the founder and chief executive, describes the listing as “equally unnerving and exciting.”
It will involve a version of shareholder democracy as members in the UK and US can buy a small share of the float.
About 20 to 25 percent have registered for up to 100 shares. “It’s a token — we want them to be part of it,” Jones says.
Since the opening of the first Soho House in 1995 in London’s eponymous borough, Jones’ uber-cool empire has grown to 28 homes around the world.
It includes The Ned, a hotel and members club in a large former Lutyens bank in the heart of the city, and the Scorpios Beach Club on the Greek island of Mykonos.
He has also recently opened a new outpost in London, 180 Strand, in a somewhat run-down and old-fashioned area.
From the outside, the brutalist concrete building looks like an unlikely location, a world away from the haute bohemian vibe of the original House on Greek Street in Soho.
Inside, though, it’s fantastic: punchy and full of mid-century modern design.
Downstairs studios have been rented for creative entrepreneurs.
Several floors are dedicated to Soho Works for members who want to tap into their laptops.
The upper floors house the club itself, with a bar, terrace and the signature Soho House rooftop pool with spectacular views over the London skyline.
Greek Street: The Original House in Soho. The company recently opened a new London outpost, 180 Strand, in a somewhat run-down and old-fashioned area
It is, Jones says, a template for the new lifestyle that many of its members will lead after the pandemic.
“For the past 18 months, everyone has been commemorating their lives. Our clubs are perfect for that hybrid way of life,” he says.
Even though the money during the lockdown was, he admits, ‘huge – huge’, less than one in ten out of 119,000 members canceled, which is impressive considering the fee is typically £1,800 a year, for facilities which were closed for long periods.
Covid-19 accelerated a digital push. “We’ve given development a boost,” Jones says.
“Within six weeks we had the first digital events on the app, so you could have a yoga class or make Negronis at home.” For those who want to make new connections, Jones says: ‘We have created an algorithm that matches like-minded people worldwide.’
There is also a ‘traffic light’ system so that ‘when you enter a club and you are alone and happy to meet people, you go green. If you don’t, turn red, and if you’re not sure, amber.’
It all adds up to a lot of great data that can be used to improve the member experience. This wealth of information would be manna from heaven for all sorts of outside sellers, but Jones says he would never accept such a thing.
This year, clubs are opening in Paris, Rome, Tel Aviv and Austin, Texas.
The group is also considering expanding in the UK, with possible locations in Manchester and Glasgow.
Jones owns a 6 pc stake. in the group and says he is not selling shares in the float. ‘No. No.’
But why, as a company synonymous with British style, float in New York?
“Well, 60 percent of our business, our profits and our sales are in America,” he says.
The decision may also have something to do with the fact that the largest shareholder, tycoon Ron Burkle, is American at 44.8 percent.
London restaurateur Richard Caring also has a substantial share of 20.5 percent.
Jones says there is “a huge roadmap for expansion” in the US, including a Ned in New York.
The float includes a dual-share structure, giving it and the other major shareholders increased voting rights.
These are criticized in some quarters in the UK where the tradition is that all shareholders are treated equally, but in the US this is normal practice.
“It’s very standard in founder-led companies,” Jones says.
Amsterdam: Since the opening of the first Soho House in 1995, the empire has grown to 28 homes around the world, including this outpost in the Dutch capital
The float has not been greeted with universal acclaim.
Skeptics argue that behind the fashionable facade the figures are less attractive.
The company is highly indebted and has never turned a profit, while red ink rose to $235 million (£169.6 million) last year. Revenues fell to $384 million (£277.1 million), from $642 million (£463.3 million) in 2019.
The float, Jones says, represents a milestone in the company’s maturity.
“We’ve been going 26 years now. The Membership Collective Group is beyond adolescence.
‘We need a little discipline and structure.’ The company plans to cut $550 million in loans from Goldman Sachs by about half through the float.
“We’re going to clean up the balance, we’ve got the dustpan and dustpan,” Jones says
“We haven’t made a profit because we’re expanding so much. The goal is to be profitable by the end of 2022.”
A common complaint is that expanding the chain risks destroying the unique spirit of Soho House.
New members, Jones says, will be added carefully. With each new house, there are between 3,000 and 5,000. The waiting list is up to 48,000.
“We don’t want to dilute the brand, we don’t want to become overcrowded. Our members love that we are expanding to new cities.
“For the next three to four years, we will have seven new openings a year. The more cities we have, the more members we get, as well as new, interesting members.’
The expansion is capitalist, with landlords paying to develop the site, while Soho House charges a fee for the design and then pays the rent.
The idea is that the arrival of Soho House will increase the area and value of the building. A global brand and an IPO on Wall Street were certainly not on his mind when, as he puts it, he started the company by accident in 1995.
“Was it a Eureka moment? No. It was much more of an accident.’
Jones was running Cafe Boheme on Greek Street when his landlord offered him the upstairs offices.
Back then, he says, ‘I hadn’t even been to the Groucho’ – which in the days before had been overshadowed by Soho House, a magnet for creatives.
Then he was struck by the thought of creating a ‘home from home’ for members – if your home is an artfully eclectic and unobtrusively expensive retreat, that is.
In private life, the 57-year-old entrepreneur is married to Kirsty Young, the TV and radio host.
The couple met at one of his properties, Babington House in Somerset and they have two daughters, Freya and Iona.
It may be coming of age as a business, but Soho House is popular with millennials and Gen Z, in other words, under 40s. The average age is 38 years.
How about opening new clubs for those who are old but still like to think they are creative and cool?
“I’ve been thinking about doing it,” Jones laughs. “In time for me.”
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