Soho House returns to prominence amid parent company’s latest growth plan

It goes back to basics for the Soho House parent company’s Membership Collective Group and the continued pursuit of profitability has been achieved. evaded it for almost three decades.

MCG – the company also owns brands like Ned NoMad, as well as hotel chains The Line and Saguaro — reported a loss of nearly $92 million for the third quarter on Wednesday. That’s a larger loss than the $77 million loss seen during the same time last year. Company leaders attributed this year’s loss to a combination of inflation and the FX, or foreign exchange market. (Soho House has significant exposure in the UK and Europe, where currency values ​​have plummeted in recent months against the dollar.)

Despite being hugely popular and currently on the longest waiting list ever, Soho House has never been a profitable business in its 27 years of business. Company leaders have previously told TPG that they expect that to change by the end of the year. While that timeline may be pushed a little further, the company – which went public last year – seems more focused than ever on profitability.

“If we go back to the beginning of this year, I don’t think anyone could have predicted the level of inflation we’ve been through with clarity, nor the labor market,” said MCG CEO Andrew Carnie. said in an interview with TPG before Wednesday morning earnings call. “If you take [foreign exchange market] noise in the last quarter, we were pretty close to breakeven.

The company will likely be in a similar position until early next year before it starts to turn a profit, Carnie added. That’s where the corporate marquee brand is more important than ever.

Soho House may have been MCG’s original brand, but recent years have opened up new offerings. The additions include Scorpios Beach Club in Greece and The Ned locations in London and New York City. Additionally, the company has even started offering technology to target digital memberships to Soho House and focus on editorial content. There is also an impulse to more Soho House locations — up to nine new properties each year.

Pursuing profitability means turning to what growth might look like in the future. Some people may say that what is old is new again.

Many of the company’s brands are still a part of MCG’s growth, but Soho House will get the most attention. The goal is to expand that brand with greater efficiency and “make sure we deliver great value to our members,” Carnie said.

That means opening a slightly smaller number of Soho Houses each year – five to seven, which was the previous growth plan – and discontinuing digital membership to focus instead on physics clubs. The company also plans to recalibrate staff levels to better match the way members currently use the clubs. (This could mean, for example, increasing staff while clubs are busy and having fewer staff during off-peak times.)

Some of these moves follow a company-wide membership survey that found members want to be more focused on the asset level rather than on the digital platform. Carnie said that while members like the design of the clubs, the atmosphere and the events, they would like to see an improvement in the service, program and selection of events.

Members also noted that they wanted more depth on food and beverage offerings. Keep in mind that MCG leaders on earlier earnings calls have noted that increasing food and drink prices in individual clubs is one way members can perceive inflation.

“Those are just some of the basics that we’re going to really focus on,” Carnie said.