Soho House has made an "ambitious move" to get its "mojo back", striking a £2 billion takeover deal to take the international members' club private after four years listed on the New York Stock Exchange, said The Telegraph.
The takeover, led by one of the largest hotel operators in the US, could give the company a much needed boost. "Can Soho House become the playground of the rich and famous once again?"
Star appeal
Nick Jones opened the first Soho House three decades ago. Located above his restaurant, Cafe Boheme, on London's Greek Street, it was envisioned as a "networking destination for 'creatives'", as opposed to the corporate clientele that dominated other social clubs, said the Daily Mail.
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It soon became a "favourite hangout spot for celebrities"; in 2016, Prince Harry and Meghan Markle chose the club's Dean Street Townhouse as the location for their very first "clandestine rendezvous", said The Telegraph, reflecting the brand's "enticingly exclusive appeal".
Soho House has since turned into a "sprawling global empire" with around 200,000 members in 46 outposts around the world, including Paris, Mexico City and Hong Kong. Membership – which costs around £3,400 for global access – isn't easy to secure; applicants must be nominated by two existing members and provide a biography detailing their career and interests. Kim Kardashian was reportedly denied membership multiple times because the process was "too selective".
After the pandemic, the group relaxed its "stringent" membership requirements and "ballooned" in size. But the rapid expansion brought fresh issues as members began complaining about crowded clubhouses and "lacklustre service".
Soho House's "glamorous star has faded" and the group's share price has plummeted since it was listed back in 2021. Last year, the New York-based short seller GlassHouse published a "damning criticism of the company's 'broken business model and terrible accounting'". The chain, which appointed Andrew Carnie to replace Jones as CEO in 2022, said it "fundamentally rejects" the report.
Soho House has spent decades styling itself as an edgy hangout for creatives seeking to set themselves apart from "boring old City suits", said the Financial Times. But the buy-out means the "finance crowd" has finally managed to "elbow its way in".
While MCR Hotels is leading the takeover, a group of existing shareholders, including Nick Jones, will retain their stakes in the company. Hollywood star Ashton Kutcher will also invest and join the new board of directors.
The "upshot" is that the deal will bring together investors with experience of running successful hotels and expert financiers, while keeping "faithful insiders" as part of the journey. "But make no mistake: faith is exactly what's needed to turn this into a good deal for the buyers."
The acquisition valued Soho House at a "punchy" 16 times its ebitda (earnings before interest, taxes, depreciation and amortisation) this year. In order to deliver a solid return, the company will need to "find more members, charge existing ones more, or spend less on showing them a good time", and "probably all three".
Still, the deal will "undoubtedly" free Soho House bosses from the "expensive and time-consuming requirements from life on the stock market", said The Telegraph. And there are already signs that it is "rekindling its reputation as the place to be seen", with Dua Lipa hosting a star-studded after-party at the White City venue in June.
Members are "hopeful" that the buy-out will mark a "return to form", transforming the global chain into something closer to the "exclusive refuge" it once represented.
