Soho House plans an offensive expansion while submitting the file for the New York IPO

Soho House, which owns private member clubs in North America, Europe and Asia, has set out aggressive expansion plans for public publication in New York.

According to people familiar with the matter, the group, which is changing its name to the Collective Membership Group as part of the initial public offering, is targeting an estimated $ 3 billion.

As coronary heart disease blockages begin to ease and vaccination programs are expanding, the company is trying to invest in travel and leisure stocks that have benefited like Hilton, Marriott, Hyatt and Airbnb.

Founded by UK businessman Nick Jones and backed by US billionaire Ron Burkle, the hospitality group has become a tradition for celebrities from Damien Hirst to Harry Prince.

It plans to open another 18 new locations by the end of 2023, adding to the 28 it already has, according to what was presented to the U.S. Securities and Exchange Commission on Monday. The long-term plan is to open between three or four new sites each year.

The company hopes that the strength of its partner model during the pandemic will increase its attractiveness to investors. According to the data presented, it maintained an average retention rate of 94 per cent last year between 2016 and 2020 between members of 92 per cent.

The group said it would change its name to the Membership Collective Group, reflecting other brands such as The Ned and Scorpios beach clubs, confirming previous reports. It will be listed under the “MCG” marker.

The company did not say how many shares it will sell or for what amount, as the strength of its model during the coronavirus crisis has given it confidence. assessment those who knew the subject said it was higher than the $ 2 billion mark it set in the $ 100 million round of funding last year.

28 An annual membership that allows access to all Soho House sites costs about $ 3,400 in the U.S. At the beginning of the year, the waiting list for membership was more than 48,000, according to the data presented.

“You can see why they are using this moment to IPO,” said Richard Clarke, a travel analyst at Bernstein. “How well we saw Airbnb’s IPO is a desire to travel.”

The Collective Member Group added that it could benefit from assuming that people would rather “work from anywhere” rather than return to the office, but warned: “At the moment no one knows how this digital nomadic trend will behave”.

Although it collected about 16 percent annually between 2016 and 2020, the company has never made a profit thanks to the rapid opening of new venues.

Over the past two years, it has focused on increasing the proportion of revenue coming from membership fees, rather than relying on food, beverage sales and the organization of events at its clubs.

Non-members have stopped using the house and have set different membership levels, such as allowing only limited access to a £ 100 “Soho Friends” subscription. It will launch digital management in the fall, which will act like a paid social networking site.

“Offering a new digital-only opportunity will make our membership truly global and diverse,” Jones said in the presentation.

Revenue in the first quarter of this year was $ 72 million, down from $ 142 million in the same period last year. The group reported a net loss of $ 93 million in the quarter compared to a $ 45 million loss in the same period in 2020.