Billionaire Ron Burkle’s Soho House group hit a $2-B valuation after raising $100-M from new investors to fund 2Xing the size of its chain of hotels and private members’ clubs around the world.
The valuation marks a solid return on the investment for Ron Burkle’s investment fund Yucaipa which took a majority stake in the elite hospitality group for $321-M in January 2012.
Over the last year Soho House has opened up another 5 “Houses” and 5 “Townhouses” including White City (London), Dumbo (Brooklyn, NYC), Amsterdam (Netherlands), Little Beach House Barcelona and Soho House Mumbai.
Marking something of a turnaround and lifting some of the gloom over the company’s estimated $500-M debt pile, Soho House announced turnover was up 20% to $556-M, driven by membership subscription income up 30% to $135-M and strong food and beverage sales up 20% to $245-M.
Nick Jones, Founder and CEO of Soho House, said that over the year Soho House has taken an “important step” towards becoming “a truly global members network.” Expansion plans are afoot and in Ys 2020 and 2021 Soho plan to open new venues in Paris, Austin, Mykonos, Rome, London, Tel Aviv, Nashville and Brighton.
However, last year CFO Peter McPhee confirmed the company was still in “growth mode” having made a pre-tax loss of £65-M in Y 2018, up from £60-M in Y 2017.
Mr Jones said he expected the company to be profitable “within about two years”, adding that the latest investment meant that “we’re good for cash”.
He added: “Opening new houses is not the cheapest thing to do, but if we stopped all of that we would be profitable very quickly.
“But we are in development mode . . . what excites our members the most is when we open in a new city.”
The company, which 1st launched in London in Y 1995, secured the investment from real estate investment trust Simon Property Group and Raycliff Capital for a 5% stake, valuing the company at $2-B. Soho House was valued at about $300-M in Y2012, when billionaire retail investor Ron Burkle acquired it.