No, Soho House isn’t dying a WeWork death. But it’s still losing money
The feeding frenzy of "Soho House is so over"-coded stories reached a crescendo earlier this year.
A report from GlassHouse Research labeled the company as one with a broken business model — no better than fallen-from-grace coworking brand WeWork. Society magazines like Tatler wondered if Soho House’s moment had passed. Even I have noticed that lifestyle hotels like Marriott’s Edition seem to poach employees from a nearby Soho House when they open in a city ... and provide a similarly chic lifestyle experience without the hassle of waitlists and monthly membership fees.
Don’t mistake the media chirping for a death rattle at Soho House as reality, though. The company beat analyst expectations for performance over the first three months of this year, with revenue up 3% from a year ago and membership revenues up 20% over last year's.
Things aren’t perfect: The company posted a $46 million loss — fuel for critics who note the company has consistently lost money since the first Soho House opened in London in 1995 — in the first quarter. There’s also chatter about the company going private again after a less-than-stellar showing since going public on the stock market: The company’s $5.40 share price Monday morning is down nearly 57% from when it debuted in the summer of 2021.
Yet, company leaders maintain there is wind in the sails at Soho House, and there is a strategic vision to fuel profits and keep members happy.
“While overall revenue in the quarter was solid, in-house revenues were lower given macro conditions. ... However, throughout the quarter, we saw sequentially stronger in-house revenue performance, and that trend has continued into April, strengthening our confidence in the year ahead,” Soho House & Co. CEO Andrew Carnie said Friday on a company earnings call.
Despite the negative publicity to kick off the year, people clearly still want into Soho House: The company’s membership count at Soho House grew by more than 4,000 members in the first quarter, and overall membership across all brands — which includes other entities like Scorpios Beach Club and The Ned — is up nearly 10%.
The waitlist of people vying to get a membership now stands at 102,000, the highest number in company history.
But there are also a few calls of distress coming from inside the House: The number of frozen memberships is currently at 10,052 — a 330% increase from a year ago. But this is still only 5% of overall Soho House membership.
Company leaders noted in-House spending is down, but they appeared to blame some of this on inflation and “dry January,” when people often try to avoid alcoholic beverages.
It doesn’t appear the company plans to offset any reduced spending on food and beverages by raising 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 around driving efficiencies in the back end. So, we are very comfortable with our pricing at the moment.”
Soho House’s opportunity in the Americas
Carnie noted during the call that the “vast 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 refreshes at existing Soho Houses in London, Los Angeles and New York City. New menus, restaurants, pop-ups and wellness facilities are typical in a refresh, per the investor call.
The company also appears to see further growth opportunities in the Americas, with Soho House Sao Paolo next on the brand’s lineup of openings.
“There is more opportunity to open more houses in North America, in existing markets and also to grow in other regions,” Carnie said.
The financial performance isn’t perfect, but chatter like that doesn’t exactly sound like a company on its last WeWork-esque leg.
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- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
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| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
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Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.