The Soho House is entering a club of its own: The stock markets

Since its inception, the Soho House chain of members clubs has been associated with exclusive hangouts for the jet set, where celebrities and deep-pocketed professionals shell out thousands of dollars each year to gather in sleekly designed urban redoubts.
 

Now its parent company, Membership Collective Group, is set to join a different sort of club — the public stock markets — when it begins trading on the New York Stock Exchange on Thursday at a roughly $2.8 billion valuation. The company has raised $420 million from its initial public offering, at the low end of its expected range, largely on the promise that it can continue to rapidly export its model across the globe.
 

“There’s huge global opportunity,” Nick Jones, the company’s founder and chief executive, said in an interview. “We really, really think it’s the time to do this now.”
 

MCG’s new life as a public company will test its proposition that a business built on exclusivity — 59,000 people were on its wait list for membership as of May 30 — can achieve ambitious growth targets. Jones, who in 1995 created the first Soho House in a central London restaurant as a modern take on traditional gentlemen’s clubs, argued that MCG follows in the footsteps of companies like Peloton, which has parlayed the status symbol created by its pricey exercise bikes and treadmills into reliable subscriber fees.
 

Soho House now has roughly 119,000 members at 30 clubs around the world, drawn largely from industries like the arts and the media. Mainstays also include celebrities: British tabloids tittered for weeks over reports that Prince Harry and Meghan Markle had spent an early date at one of the Soho Houses in London.
 

But MCG must also prove that its business is durable.
 

It has lost money for its entire existence, including $235.3 million during pandemic lockdowns in 2020, nearly double what it lost the previous year. In-house sales of food and drinks, a major source of revenue, plunged 60 percent in 2020.
 

And the company’s balance sheet has been weighed down by debt: It carried $2.1 billion in total liabilities as of April, taken on largely as part of its expansion efforts.
 

MCG executives argue, however, that the worst is over for the company. Even during the pandemic last year, its retention rate was 92 per cent, as members largely opted to keep paying their dues.