Soho House's Parent Company Releases Financials Ahead of IPO

By

Jun. 22 2021, Published 11:00 a.m. ET

After a tough year for in-person operations, Soho House and its corporate companions are going public. Parent company Membership Collective Group first announced the IPO in May 2021, and has since divulged its financials in a registration statement with the SEC—its first official step toward the public market.

Article continues below advertisement

What does the future look like for Soho House and the MCG umbrella, and what can investors expect from the impending IPO?

Soho House's parent company publicized its IPO registration statement

MCG first filed with the SEC on a confidential basis, but has since taken the step toward publicizing the document. Once a company goes public, all the financials are public record. Some companies like to ease into this. Of course, we're still waiting for the company to fill out some crucial details about the offering, but it's evidence that the Soho House family is taking things seriously.

Article continues below advertisement

The company is a "global membership platform of physical and digital spaces" that consists of Soho House, Soho Home, Soho Works, The Ned, and Scorpios Beach Club. MCG has properties around the globe, with locations in Hong Kong, London, Mykonos, and—of course—New York City.  

Will Soho House's lack of profitability keep it from succeeding in the market?

Soho House has never been profitable. The company says, "We have incurred net losses in each year since our inception, and we may not be able to achieve profitability." This is a risk that many companies and investors take, as evidenced by brands such as Uber and Airbnb.

Article continues below advertisement

The market knows that profitability can be difficult to balance when a company is growing, but public shares of Soho House stock will put pressure on MCG to convert. This could end up increasing prices for services, and Soho House may not be in a position to do that so soon after the pandemic.

MCG says in its S-1, "Despite the significant impact on our sales and profitability that the pandemic had in fiscal 2020 and continues to have in fiscal 2021, it has allowed us to accelerate changes within the business, both to focus even greater energy on improving our offer for members, and to drive sustainable efficiencies through a lower cost base. We accelerated our digital expansion and launched new membership types, Soho Friends and SOHO HOME+, and we have further digital projects ready to launch in 2021."

Article continues below advertisement

What's Soho House's IPO date and price?

In its filing, MCG wrote an IPO valuation of $100 million. This is a common placeholder and likely much lower than the actual valuation, especially since Soho House alone holds a corporate valuation of at least $2 billion (and that's just a part of MCG's network of brands). The fact that this members-only operation is going public at the same time as WeWork, a coworking company for people in the know, shows a marked shift in the landscape of public companies.

The Soho House IPO date is still under wraps. The next step will be to finalize the IPO valuation and share price, after which investors will be able to mark their calendars for an interesting—if not unpredictable—IPO. 

Advertisement

More From Market Realist

    • CONNECT with Market Realist
    • Link to Facebook
    • Link to Twitter
    • Link to Instagram
    • Link to Email Subscribe
    Market Realist Logo
    Do Not Sell My Personal Information

    © Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.