5 days ago
Soho House profits jump after members club makes it harder to join
Soho House has reported a jump in profits after the members club shut its doors to new members in key cities amid complaints about overcrowding.
The London-based group posted an operating profit of just under $60m (£44.6m) in the three months to July – up from $35m in the previous quarter. It marks the first time it has posted consecutive quarterly profits after three decades in the red.
Revenues rose 9pc to $330m, driven by growth in both memberships and in-house sales such as food and drink.
The improved performance suggests turnaround efforts at Soho House, which launched from a single town house on Soho's Greek Street in 1995, are starting to bear fruit.
Under chief executive Andrew Carnie, the members' club has slammed the brakes on its rapid expansion following complaints its sites were becoming too busy and losing their exclusivity.
Soho House stopped accepting new members in London, New York and Los Angeles last year in an effort to slow growth.
Instead, it has focused on refurbishing its clubs, improving its food and drink offering, and introducing new wellness facilities.
Soho House has also invested more in events and experiences such as its London festival and pop-up hospitality suites at Formula 1 races.
Nevertheless, the group has continued to open new locations in recent months, including Soho Mews House and Soho Farmhouse Ibiza, taking the total to 46 clubs worldwide.
It now has more than 270,000 members – up 2.2pc on last year – with the waiting list for membership at a record high.
It comes as Ron Burkle, the billionaire Soho House chairman, revives efforts to take the company off the stock market.
In December, Mr Burkle and a consortium of investors tabled an offer to take the company private for $9 per share, valuing it at almost $1.8bn. Its market valuation currently stands at just under $1.3bn.
Soho House, which has set up a special committee to assess the bid, said it was continuing to explore the move but that there was no guarantee a deal would take place.
Mr Burkle has argued that the market has undervalued Soho House. Shares have plummet by almost 50pc since its New York listing in 2021.
Soho House has clashed with New York-based short seller GlassHouse, which last year published a report comparing it to formerly bankrupt co-working business WeWork and accusing the company of having a 'broken business model and terrible accounting'.
Soho House said the report included 'factual inaccuracies, analytical errors and false and misleading statements'.
Mr Burkle, 72, acquired a majority stake in Soho House from restaurateur Richard Caring in 2012. Together with Nick Jones, the club's founder who stepped down as chief executive in 2022 to recover from cancer, they own 75pc of the company.
Mr Carnie said: 'Our second quarter results reflect the continued strength of the Soho House membership model and the real progress we've made in transforming the business.
'We're continuing to focus on what matters most to our members – whether it's experiential openings like Soho Farmhouse Ibiza, refreshed spaces across our existing Houses, or more curated cultural programming.
'We've also launched in our Houses new Soho Health Clubs with holistic and advanced technology wellness facilities, and introduced new food and beverage residencies and diversified our menus – all of which help to deepen the value of Every House membership.'
