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Soho House returns to spotlight amid parent company’s latest growth plans

Nov. 16, 2022
4 min read
Soho House Austin
Soho House returns to spotlight amid parent company’s latest growth plans
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It’s back to the basics for Soho House parent company Membership Collective Group and its continued chase toward the profitability that has evaded it for nearly three decades.

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

Although it's very popular and currently sitting on its longest-ever waitlist, Soho House has never been a profitable enterprise in its 27 years in business. Company leaders previously told TPG they expected that to change by the end of this year. While that timeline might be pushed out a little bit, the company — which went public last year — appears to have a sharper-than-ever focus on profitability.

“If we went back to the beginning of this year, I don't think anybody would have predicted the inflation that we've clearly gone through, nor the labor market,” MCG CEO Andrew Carnie said in an interview with TPG ahead of Wednesday morning’s earnings call. “If you take the [foreign exchange market] noise out of the last quarter, we were pretty close to breakeven.”

The company is likely to be in a similar position through early next year before moving into profitability, Carnie added. That’s where the company’s marquee brand has more importance than ever before.

Back to basics

Soho House might be the original brand of MCG, but recent years ushered in new offerings. Additions include Scorpios Beach Club in Greece and The Ned locations in London and New York City. Additionally, the company even began a tech offering to target digital memberships to Soho House and focus on editorial content. There was also a push to add more Soho House locations — as many as nine new properties a year.

Chasing profitability means shifting gears on what growth might look like going forward. What’s old is new again, some might say.

Many of the company’s brands are still part of MCG’s growth, but Soho House will attract most of the attention. The goals are expanding that brand with more efficiency and “making sure we’ve got great value for our members,” Carnie said.

That means opening a slightly smaller number of Soho Houses each year — between five and seven, which was a previous growth plan — and pulling the plug on the digital membership offering to instead focus on the physical clubs. The company also plans to rework staffing levels to better accommodate how members currently use the clubs. (For instance, this could mean staffing up while clubs are busy and having fewer workers during off-peak times.)

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Some of these moves come on the heels of a companywide membership survey showing members preferred more focus at the property level instead of on a digital platform. While members liked the design of clubs, the atmosphere and the events, they wanted to see an improvement when it comes to service, programming and the choice of events, Carnie said.

Members also noted they wanted greater depth on food and beverage offerings. Keep in mind that MCG leaders on prior earnings calls noted that raising the price of food and drinks within individual clubs was one way members were likely to notice inflation.

“It's just some basic things that we're going to really focus on,” Carnie said.

CEO steps down

The company made a major leadership change announcement early Wednesday when it shared that founder and CEO Nick Jones was stepping back to a founder role following a prostate cancer diagnosis earlier this summer. Carnie became CEO as of Wednesday.

Jones is cancer-free following treatment and surgery, and he doesn’t appear to be moving into full retirement. However, he does plan to take on less of a corporate role moving forward.

“I'm just going back to doing exactly what is so special that needs to be delivered in our houses, which is designing fantastic spaces [and] always evolving, always trying to create something new and different [and] always thinking outside the box,” Jones told TPG. “I've spent a lot of time in the office over the last few years, and I'm going to get back into the houses, [which is] the reason I set it up in the first place.”

Featured image by CRISTINA FISHER/MEMBERSHIP COLLECTIVE GROUP
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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  • Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.
  • Earn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S., and earn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
  • Earn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
  • $120 Uber Cash on Gold: Add your Gold Card to your Uber account and each month automatically get $10 in Uber Cash for Uber Eats orders or Uber rides in the U.S., totaling up to $120 per year.
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  • Choose the color that suits your style. Gold or Rose Gold.
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  • Annual Fee is $250.
  • Terms Apply.
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Apply for American Express® Gold Card
at American Express's secure site
Terms & restrictions apply. See rates & fees
Best for the well-traveled foodie
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

4XEarn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S.
4XEarn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
3XEarn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
  • Intro Offer
    Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.

    60,000 bonus points
  • Annual Fee

    $250
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    670-850
    Excellent/Good

Why We Chose It

There's a lot to love about the Amex Gold card. It's been a fan favorite during the pandemic because of its fantastic rewards rate on restaurants (that includes takeout and delivery in the U.S.!) and U.S. supermarkets. If you're hitting the skies soon, you'll also earn bonus points on travel. Paired with up to $120 in Uber Cash (for U.S. Uber rides or Uber Eats orders) and up to $120 in annual dining statement credits at eligible partners, there's no reason that the foodie shouldn't add this card to their wallet. Enrollment required.

Pros

  • 4x on dining at restaurants and U.S. supermarkets (on the first $25,000 in purchases per calendar year; then 1x)
  • 3x on flights booked directly with the airline or with Amex Travel
  • Welcome bonus of 60,000 points after spending $4,000 in the first six months

Cons

  • Weak on travel outside of flights and everyday spending bonus categories
  • Not as useful for those living outside the U.S.
  • Some may have trouble using Uber/food credits
  • Few travel perks and protections
  • Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.
  • Earn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S., and earn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
  • Earn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
  • $120 Uber Cash on Gold: Add your Gold Card to your Uber account and each month automatically get $10 in Uber Cash for Uber Eats orders or Uber rides in the U.S., totaling up to $120 per year.
  • $120 Dining Credit: Satisfy your cravings and 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, Milk Bar and select Shake Shack locations. Enrollment required.
  • Choose the color that suits your style. Gold or Rose Gold.
  • No Foreign Transaction Fees.
  • Annual Fee is $250.
  • Terms Apply.
  • See Rates & Fees