The food frenzy of “Soho House is Therefore over” reached its peak earlier this year.
A report from GlassHouse Research pegged the company as one with a broken business model – no better than fellow disgraced WeWork brand. Society magazines like Tatler wondered whether Soho House’s time has passed. Even I have noticed that lifestyle hotels like Marriott’s version apparently poached staff from nearby Soho House when they opened in one city… and offers the same luxury lifestyle experience without the hassle of waiting lists and monthly membership fees.
However, don’t mistake the media buzz about the death at Soho House for the truth. The company beat analysts’ expectations for its performance in the first three months of this year, with revenue up 3% from a year ago and membership revenue up 20% from last year. .
Things weren’t perfect: The company posted a loss of $46 million – motivation for critics to take note The company continuously lost money since the first Soho House opened in London in 1995 – in the first quarter. There are also rumors about the company going private again after a less-than-stellar performance since its stock market listing: The company’s $5.40 share price on Thursday morning Two is down nearly 57% from its summer 2021 launch.
Still, company leaders maintain that Soho House has smooth sailing and has the strategic vision to boost profits and keep members happy.
“While total revenue for the quarter was stable, internal revenue was lower due to macro conditions. … However, throughout the quarter, we saw consistently stronger internal revenue performance and that trend continued into April, reinforcing our confidence for the year ahead,” Soho House & Co. CEO Andrew Carnie said Friday during the company’s earnings call.
Despite negative publicity at the start of the new year, it’s clear that people still want to join Soho House: Corporate membership at Soho House increased by more than 4,000 members in the first quarter, and the total number of members of all Both brands – including other institutions such as Scorpios Beach Club and The Ned – increased nearly 10%.
The waiting list of those vying to become members now stands at 102,000, the highest number in the company’s history.
But there are also some urgent calls coming from within the House: The number of frozen members is now 10,052 — up 330% from a year ago. Company leaders also noted that internal spending is falling, but they appeared to blame this partly on inflation and “dry January,” when people typically try to avoid alcohol .
Daily newsletter
Gift your inbox with the TPG Daily newsletter
Join over 700,000 readers to get breaking news, in-depth guides and exclusive offers from TPG experts
It appears the company has no plans to offset any reduced spending on food and beverages by increasing membership fees.
“We are focused on delivering the best member experience,” Carnie said. “I feel really good about our pricing. … Where we find the biggest opportunity is in driving efficiency downstream. So we’re very comfortable with our pricing on right now.”
Soho House’s opportunity in the Americas
Carnie noted on the call that “the majority” of growth in the first three months of 2024 came from the 25 Soho Houses that have opened since 2018. Some of these include properties in Nashville; Austin; Portland, Oregon; and Mexico City.
What’s next for the brand? Expect a refresh at Soho Houses currently in London, Los Angeles and New York City. New menus, restaurants, pop-ups and wellness amenities are typical of the refresh, according to investor calls.
The company also seems to see it Opportunities for further growth in the Americaswith Soho House Sao Paolo next on the brand’s opening list.
“There are more opportunities to open more homes in North America, in existing markets and also to grow in other regions,” Carnie said.
The financial performance isn’t perfect, but such talk doesn’t sound like a company on its last legs like WeWork.
Related reading:
