Although rising demand has led to lockdown concerns, Soho House is “super confident”


Soho House Ltd update

The Membership Collective Group, owner of Soho House, said that despite concerns that the spread of the Delta variant of the coronavirus may lead to further lockdowns, it will soon “go all out.”

The group said on Thursday that its first performance since its stock market debut last month was disappointing. The total revenue for the quarter ended July 4 was $124 million, an increase of 118% from the same period last year when most of its private members’ clubs It’s all closed. Net loss narrowed from US$77.8 million to US$57.1 million because members paid more for rooms, especially in resort-type locations.

MCG CEO Nick Jones stated that Soho House’s waiting list for members has reached an “all-time high” with 63,700 applications. Soho House’s clients include reality star Kendall Jenner and supermodel Kate Moss. . But he pointed out that the organization has adopted a “cautious approach” when accepting new members to allow social distancing related to the coronavirus to be maintained in its clubs and hotels. Only 600 people were selected this quarter.

Membership income is the same as in the same period in 2020, at 45 million U.S. dollars, but the number of members with frozen accounts has dropped from 16,500 in the first quarter of 2021 to 10,800 at the end of the second quarter because of the club’s lockdown.

However, the company benefited from a surge in demand from existing members, and the average daily rate of its portfolio increased by 10% to 15%. The prices of its Miami Beach villas and Oxfordshire farmhouses are also higher than in 2019.

The occupancy rate of its website has reached 63%, compared with about 95% at the end of 2019.

MCG President Andrew Carnie stated that the company was “very focused on managing the cost aspects of the business” but he was “very confident [that] go through [the] At the end of the third quarter, if the restrictions have not increased and the situation has not changed much, we should go all out.”

Group Listed in New York In July, it was US$48 million less than the US$450 million target to support its rapid expansion plan and repay US$98 million in debt. The group’s share price rose 4.5% in pre-market trading in New York on Thursday, but fell after the opening. Since the company’s debut, they have been falling, which shows that people are worried about whether MCG will be profitable-something it hasn’t achieved in its 26-year history.

Citigroup analyst Steven Zacone stated that MCG has “a unique consumer growth story that combines a growing number of units, improved household economics, recurring membership income and significant profit margin expansion opportunities”, but its The business still faces the risk of shutdown due to the spread of Delta variants.

“We are not worried about the stock price now because we are very confident in realizing the plan,” Carney said. MCG’s goal is to open 5 to 7 Soho Houses each year, with one each for its Ned and Scorpios brands.

The group expects to have positive cash flow by the end of 2022.

This quarter, it opened two Soho House venues in London and Austin, Texas, and will open clubs in Tel Aviv, Paris, Rome and Brighton this year. Currently, it operates 30 “houses” in 12 countries.

Although the growth of its core Soho House membership has slowed, it continues to add members to other brands. This includes co-working company Soho Works and interior decoration brand Soho Home, which added 8,000 new members during the quarter.

MCG said that with the relaxation of pandemic restrictions, the occupancy rate of its Soho Works factory has increased to more than 80%.


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