Soho House, the ultra-exclusive members’ club and lifestyle brand, is preparing to become private. This extremely good news deal of $2.7 billion could spark a whole new future for the rusty old city. The agreement, which sees new investors paying $9 per share for approximately 15% of the publicly traded shares, comes as the company grapples with recent financial challenges while maintaining its appeal among high-profile clientele.
Soho House currently holds a valuation of approximately $2 billion, after being founded by Nick Jones — who still owns 5% of the company’s stock. In 2021, just a few months after its initial public offering, the firm’s stock surged to a market capitalization of $2.8 billion. Since that day in May 2022, the company’s stock has tanked, plummeting to below $9 per share. This severe downturn has led the owners to explore returning the line to private ownership.
Although Soho House is traded on the New York Stock Exchange, its corporate headquarters are based in London. The company has since become the go-to brand for a star-studded clientele featuring celebrities like Kate Moss, Kendall Jenner and Ellie Goulding. The Duke and Duchess of Sussex famously met on a blind date at Soho House’s 76 Dean Street location in London in 2016.
If the announced agreement goes ahead, it will give Soho House the chance to develop its newfound head of steam. The brand’s sales have grown two times faster than the last three years’ average growth rate. On top of that, it’s posted net positive earnings in each of its past three quarters. At the same time, it has suffered big defeats, $739 million worth since going public.
U.S. retail billionaire Ron Burkle is reported to own 40% of Soho House and control its board. In parallel, Richard Caring, owner of the Ivy restaurant group, holds 21% of the company. This new investment reflects an extraordinary level of confidence from current and new shareholders in the company’s future.
“Returning to private ownership enables us to build on this momentum, with the support of world class hospitality and investment partners,” said Andrew Carnie, Soho House’s CEO.
Soho House is the latest hospitality brand on an expansion spree! Today, they run ten sites in London and have 48 additional locations open or under construction across the globe. It adds to its landmark investments after Crescent acquired the iconic BT Tower in London’s Fitzrovia area for £275 million ($341m). Now, they’re continuing the evolutionary track by turning it into a hotel.
Soho House’s inclusive, members-first business model still prospers in the face of stock market turbulence. Rich consumers are attracted to its luxury offerings. The decision to return to private ownership may provide the flexibility needed to navigate future growth opportunities without the pressures of a public listing.
“This reflects the strong confidence our existing and incoming shareholders have in the future of Soho House & Co,” Carnie added.