Soho House received up to $22 MILLION in government bail-out loans intended to help small businesses
Global private membership club Soho House, which is valued at $2 billion, received as much as $22 million in six different loans intended for small businesses as part of the Trump Administration’s coronavirus bailout program, new records show.
Sanctioned under the Payment Protection Program (PPP), the loans went to six of the company’s US locations, situated in Los Angeles, Chicago, Miami and New York, for between $350,000 and $10 million each.
The loans came as part of a rush to inject billions into the economy as the coronavirus pandemic hit. PPP funding was intended to help small and medium-sized businesses weather the economic storm posed by subsequent lockdown orders.
Following mounting pressure to disclose specifically which businesses received loans through PPP – established by President Trump’s CARES Act – the Small Business Administration released records on Monday listing every recipient.
According to those records, Soho House & Co saved 1,996 jobs across all of its US locations thanks to the government funding.
Sanctioned under the Payment Protection Program (PPP), the loans went to each of the company’s six US locations in Los Angeles, Chicago (above), Miami and New York, and were for between $350,000 and $10 million each
The loans came as part of a rush to inject billions into the economy as the coronavirus pandemic hit. PPP funding was intended to help small and medium-sized businesses weather the economic storm posed by subsequent lockdown orders (Soho houses Miami and Manhattan locations above)
The loans were approved on April 11 and paid out by Centric Bank, public records show.
Separately, the company, which is backed by billionaire Ron Burkle, also secured a $100 million investment from new and existing shareholders last month.
In a statement to Bloomberg, the company said it is participating in government loan and furloughing programs ‘all over the world’.
‘We are, like so many businesses, racking up losses every day,’ a company spokesperson told the network. ‘Banks and landlords have deferred payments, shareholders have injected money, suppliers have been flexible, our senior team has taken pay cuts that have been invested into a Soho Impact Support Fund and, crucially, our incredible members have stayed loyal to our Houses and the teams that work there.’
The hospitality industry has been one of the hardest hit throughout the pandemic, with travel restrictions and operational restrictions suffocating capital.
However, Soho House, a familiar haunt for celebrities, movie stars and billionaires, has continued to collect membership fees from its clientele.
The company said it’s also pushing ahead with its plans for global expansion by cutting executive pay and employee hours.
The company’s founder and CEO, Nick Jones, told the Financial Times last week that ‘nothing has stopped’ because of the pandemic, and Soho House will henceforth with plans to open new locations in Greece, Tel Aviv, and Saint Vincent and the Grenadines this year.
Jones said Soho House still has an 18 month waiting list for new members and said that, thanks to new fundraising and cost cuts, the company has managed to keep its head above water. The CEO didn’t however mention the use of the PPP.
Soho House & Co saved 1,996 jobs across all of the locations thanks to the some $22 million government funding (pictured Soho House’s Meatpacking District location in NYC)
Soho House, a familiar haunt for celebrities, movie stars and billionaires, has continued to collect membership fees from its clientele throughout the pandemic (Soho House, Miami Beach above)
Separately the company, which is backed by billionaire Ron Burkle (left, with founder Nick Jones, right), also secured a $100 million investment from new and existing shareholders last month
Under the PPP scheme, hospitality companies such as Soho House were permitted to apply for loans so long as they had fewer than 500 employees at each of its locations.
However, the company’s use of the scheme, considering its value and billionaire backers, may still attract scrutiny.
In April, Shake Shack was one of several large restaurant chains criticized for receiving federal loans under the PPP scheme. The company later announced it would return the $10 million it received from the government in light of the mounting scrutiny.
In an open letter, Shake Shack CEO Randy Garutti and Chairman Danny Meyer said the NYSE-listed company no longer needed the money because they are ‘fortunate to now have access to capital that others do not.’
Soho House has not yet returned a DailyMail.com request for comment. In its statement to Bloomberg, the company said it would be using the loans to cover payroll expenses, and said it is still providing full medical insurance for its US workers.
Other high-profile recipients named on the list released by the Trump Administration Monday included Kanye West’s Yeezy apparel brand, which landed more than $5 million from the scheme.
Other high-profile recipients named on the list released by the Trump Administration Monday included Kanye West’s Yeezy apparel brand, which landed more than $5 million from the scheme
Following mounting pressure to disclose specifically which businesses received loans through PPP – established by President Trump’s CARES Act (signing above) – the the Small Business Administration released records on Monday listing every recipient
Yeezy, which is described as a ‘Black’ business on the form, saved 106 jobs with the loan that was approved on April 13.
West’s sister-in-law, Khloe Kardashian, was also a recipient of the scheme with her denim brand Good American receiving between $1 million and $2 million.
It’s reported that Good American, which Khloe co-owns with Emma Grede, saved 57 jobs using that loan.
Neither Kardashian nor Grede has taken a paycheck since the coronavirus pandemic began, the company said in a statement.
‘Due to the dramatic global impacts of COVID-19, the Good American business took a significant hit,’ a company spokesperson told PEOPLE. ‘We have a large wholesale footprint and all of our partners were forced to close their stores, with many shutting down warehouses and canceling orders.
‘Applying for and receiving the PPP loan was a necessary step we had to take to ensure the long-term survival of our brand and business,’ the spokesperson continued. ‘We are incredibly grateful to have received the loan as it has allowed us to maintain our employees’ salaries and support our team.’
Gay dating app Grindr also received between $1 million to $2 million in loans, the Treasury revealed. The company, which was recently sold by Beijing-based Kulun Tech, said the loans prevented 69 jobs being lost.
Salad chain Chopt received at least $5 million and coffee property Gregory’s received at least $2 million in bail outs.
Another high-profile recipient of the scheme was West’s sister-in-law, Khloe Kardashian, whose denim brand Good American received between $1 million and $2 million. It’s reported that Good American, which Khloe co-owns with Emma Grede, saved 57 jobs using that loan
President Donald Trump’s attorney Marc Kasowitz leaves New York state appellate court, Thursday, Oct. 18, 2018, in New York, as Trump’s team sought to dismiss or delay Summer Zervos’ claim that he defamed her by calling her a liar after she accused him of unwanted kissing and groping. Kasowitz’ law firm also got a PPP loan, documents reveal
Another recipient was the law firm of Kasowitz Benson Torres LLP, which was founded by longtime Trump lawyer Marc Kasowitz, who advised the president during his impeachment hearings among other matters.
The data underlined that in addition to mom-and-pop shops, the funds went to several well-heeled and politically connected companies, some of which got between $5 million and $10 million.
Those include firms which lobby in Washington such as Wiley Rein LLP and APCO Worldwide. Another big firm getting a loan was Boies Schiller Flexner LLP.
Sidwell Friends School, an exclusive private school which educated former President Barack Obama’s daughters, took out a loan for between $5 million and $10 million, as did Saint Ann´s School in Brooklyn, which – with tuition exceeding $50,000 per year – is attended by the children of hedge fund managers and celebrities.
The St. Andrew’s Episcopal School attended by Barron Trump, son of the president and first lady Melania Trump, got a loan valued at between $2 million and $5 million.
The prestigious Sidwell Friends school attended by the Obama children got a PPP loan
Some investment firms, such as those that run hedge funds for wealthy clients, also received checks.
That included Advent Capital Management LLC, a New York-based debt investor with $9 billion in assets; Metacapital Management LP, a New York-based fixed income investor with more than $1 billion in assets; and Semper Capital Management LP, which invests nearly $4 billion in mortgage-backed securities.
None of those companies or schools immediately responded to a request for comment.
John Arensmeyer, CEO of the Small Business Majority, lauded the release of the data Monday, but said that it was still ‘a far cry from an accurate picture of the program.’
‘Serious questions remain about whether PPP funds were equitably distributed to minority-owned businesses, and there is an alarming rate of small-dollar loans,’ he said.
‘Moving forward, SBA must revise the information to include the amount requested by a borrower and the amount received, and publicly commit to reporting revised data on a rolling basis now, and through the forgiveness process,’ he added.