The renowned celebrity hub Soho House has accused analysts of orchestrating a scheme to profit millions, alleging that the esteemed establishments are ‘overcrowded’.
Soho House, frequented by the likes of Taylor Swift, Margot Robbie, and Leonardo DiCaprio, finds itself in controversy following a financial analyst’s report suggesting that the expansion of its exclusive membership has been too rapid.
According to GlassHouse Research’s report, this expansion has led to a ‘decline in service quality,’ characterized by ‘longer wait times’ and diminished ‘personalized attention.’
The report concluded that after 28 years of losses, the company’s value is ‘zero.’
However, the private members’ club retaliated, asserting that the report was erroneous and ‘misleading.’
The company accused the report of being intentionally pessimistic, aiming to lower the club’s share price for GlassHouse’s potential gain through short-selling.
In 2015, Ellie Goulding, Sir Mick Jagger, and Taylor Swift were among the attendees at the Universal Music Brits party held at The Soho House Pop-Up and hosted by Bacardi.
In 2019, Maya Jama, Annie Mac, and Nick Grimshaw were present at the Universal Music BRIT Awards After Party, which was hosted by Soho House.
Soho House located at 76 Dean Street, London, United Kingdom
Nick Jones, the founder of Soho House, sent a letter to members stating his commitment to ensuring that their venues maintain a sense of spaciousness and tranquility.
GlassHouse and the authors of the report confirmed their status as short-sellers of Soho House.
Short-selling involves investors borrowing a company’s shares to sell, anticipating a price decline so they can repurchase them at a lower price before returning them to their original owner.
Titled ‘Soho House & Co: A company facing an existential crisis,’ the 31-page report depicted the club as having a ‘broken business model and terrible accounting.’
Following its publication, The Times reported a 30% decrease in the company’s share price, drawing parallels to WeWork’s public offering and predicting a similar fate for Soho House.
The report highlighted a ‘persistent lack of profitability,’ concerns over ‘overcrowding,’ and perceived ‘decline in service quality.’
Echoing some of these concerns, former club members expressed dissatisfaction, with one likening it to ‘the All Bar One of members’ clubs’ and another citing issues with overwhelmed venues and subpar service.
Established in 1995 in London by British entrepreneur Nick Jones, Soho House caters to ‘creatives.’
Full membership, granting access to all venues worldwide, costs nearly £3,000 annually, while membership at a single club starts at £850, rising to over £1,000 depending on location.
Venues feature amenities such as swimming pools, spas, gyms, and accommodations.
Andrew Carnie, the CEO, at Soho House on Dean Street in London.
Members often find it difficult to access pool beds during the summer months due to overcrowding at the clubs, leading to complaints.
DUMBO House offers panoramic views of New York City from its rooftop pool.
Complaints about the crowdedness of Soho House clubs have surfaced on TikTok.
The application process is thorough, mandating prospective members to submit a biography, articulate their potential contributions, and disclose any existing connections with current members.
Membership approval rests with a committee comprised of current members who evaluate applicants.
Membership at the venues is renowned for its exclusivity, yet recent disclosures from the club’s accounts shed light on a notable expansion in membership in recent years.
In October, it was reported that membership had more than doubled since the onset of the pandemic, resulting in an equivalent of 6,000 members for each venue.
In December, Nick Jones announced a temporary closure of new member applications for London, LA, and New York for the year 2024.
The GlassHouse report highlighted concerns raised by members regarding a decline in service quality at Soho House properties. It suggested that the rapid expansion of membership may strain the company’s operational capabilities, leading to longer wait times, decreased personalized attention, and an overall decline in service standards. Consequently, the company halted new memberships at select prime locations.
In response to the critical GlassHouse report, Soho House issued a statement refuting its claims. It stated, “Soho House & Co Inc. categorically rejects the recent report published by GlassHouse Research, which contains factual inaccuracies, analytical errors, and false and misleading statements, all intended to negatively impact the Company’s stock price for the benefit of the short-seller. The Company remains confident in the strength of its business and is dedicated to executing its strategy.”
A glimpse of the exterior of the celebrity-frequented SoHo House in Manhattan.
Soho House has declared its decision to halt the acceptance of new members at its clubs in New York City, Los Angeles, and London due to complaints of overcrowding.
The inside of Soho House located at 76 Dean Street in London.
In the autumn of 2023, the Company disclosed the formation of an independent Special Committee of the Board to assess specific strategic transactions, potentially leading to the Company transitioning into a private entity.
The outcome of the Special Committee’s evaluation remains uncertain, and it is uncertain whether any strategic shifts or transactions will be pursued. The Committee has engaged legal and financial advisors to facilitate its examination.
Founder Nick Jones corresponded with members in December 2023, expressing his dedication to ensuring a comfortable ambiance within their establishments. He announced plans to restrict new member admissions across Soho House locations in London, New York, and Los Angeles in the upcoming year, only accepting members in regions with available capacity.
Between October 2022 and 2023, the company experienced a 21% increase in membership, boasting 184,542 members as of October 1, a substantial rise from 118,000 just two years prior.
Complaints about overcrowding and service quality at Soho House clubs have surfaced on platforms like TikTok. Notably, an Instagram account named Soho House Memes, with 120,000 followers, highlighted frustrations, with one post commenting on lengthy waits for tables despite the significant membership fees.
The New York Soho House made a cameo in an episode of Sex and the City, where Samantha Jones, unable to secure a reservation, pretended to be a member to access the pool for herself and her friends.
Prince Harry and Meghan Markle had their inaugural date at a Soho House restaurant in London in July 2016.
Founder Jones relinquished his daily operational duties last year as he recuperated from cancer, dedicating more time to oversee the clubs.
During the COVID-19 pandemic, Soho House paused new memberships to uphold social distancing measures and rekindle its original artistic vibe.
In an attempt to maintain its creative essence, the company executed a member cull in 2010, expelling 1,000 members from its New York branch. Jones emphasized the importance of preserving the club’s welcoming and relaxed atmosphere amidst concerns of an overly corporate environment.
