Soho House Seeks to Knock Back Its Critics


Since going public nearly two years ago, the members club chain Soho House has endured a sharp decline in its stock price, economic turmoil and a short seller declaring that its shares are worthless.

But the company’s chief executive, Andrew Carnie, insists it is on the right track — even as its main shareholders consider taking the business private again.

“There’s no looking back,” Mr. Carnie said in an interview. “We’ve been pretty consistent over the past 12 months in delivering results.”

The company released its latest quarterly financial results on Friday, reporting that it lost $118 million last year, down from a loss of $220.6 million in 2022. Using the pro forma earnings measure known as adjusted EBITDA, which excludes some expenses, it doubled its profit to $128 million.

The results come amid a shift in strategy since the company’s initial public offering in July 2021.

Back then, the company was still navigating pandemic-related restrictions and said it was focused on new offerings like digital memberships in countries without clubs, as well as its nascent co-working business.

Soho House now believes its core business of high-end private clubs in major cities is enough to deliver the robust growth demanded by the stock markets and maintain its cool reputation.

Soho House has continued to grow. Over the last year, it has opened locations in Mexico City; Portland, Ore.; and other cities. It operates 43 houses and has a membership waiting list of more than 100,000 people.

In its results on Friday, Soho House reported rises in revenues both from membership fees and spending at its houses.

But the company’s stock is down nearly 60 percent from its initial offering price. Developer partners have been hurt by the decline of commercial real estate and an increase in labor costs. And in November, the company blamed bad weather and the temporary closure of its location in Tel Aviv for disappointing quarterly results.

The earnings announcement on Friday will be closely scrutinized in light of a report last month by the short-seller Glasshouse Research that derided the company as having a “broken business model and terrible accounting” and compared it to WeWork. Short sellers profit from declines in a company’s stock price.

“The report is pretty false and inaccurate,” Mr. Carnie said. “The way it was written, it was designed to grab headlines.” (Soho House’s stock price dipped after the report was published, but it has largely recovered.)

A bigger question is what Soho House’s biggest shareholders, including the billionaire Ron Burkle, have in mind for the company. In its rebuttal of the Glasshouse report, Soho House disclosed that a special committee of its board was weighing potential transactions, including taking the company private.

Mr. Carnie declined to comment on those deliberations, but said he would be happy to keep running Soho House as a publicly traded company.

“There are no regrets,” he said. “I’m really happy with our progress over the last 12 months.”


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