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.

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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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