Soho House finds new home with $2bn New York float

3 February 2018, 13:52

Soho House, one of the world's biggest networks of private members' clubs, is plotting a flotation in New York‎ that will value the company at about $2bn (£1.4bn).

Sky News can reveal that UK-based Soho House, which opened its original venue in central London in 1995, is drawing up plans for the listing, with an announcement expected around the middle of this year.

The Wall Street investment banks Goldman Sachs and JPMorgan have been hired to oversee the initial public offering, which ‎is likely to involve raising hundreds of millions of dollars to fund its ongoing international expansion.

A move to go public will bring even greater attention to a hospitality group which already attracts huge media focus because of its star-studded membership base and parties.

Soho House, which was founded by Nick Jones, the entrepreneur who is married to broadcaster Kirsty Young, now has a presence in cities including Barcelona, Berlin, Chicago, Istanbul, Miami and New York.

The company is to open new venues‎ this year in Amsterdam and London, and has set its sights on expanding into Asia - with openings planned for Hong Kong and Mumbai - and Latin America in the near future.

Originally targeted at executives in the media and creative industries, a Soho House membership has become a status symbol for international executives working in sectors including music, fashion and broadcasting.

The company prides itself on offering members a discreet and relaxed environment in buildings often housing a hotel, restaurants, gym and other facilities.

Its clubs have become a home-from-home for A-list celebrities, with the likes of Kate Moss and Eddie Redmayne among those photographed emerging from Soho House parties.

Soho House's breakneck expansion has been facilitated by a series of deals, including the sale by Mr Jones of a controlling stake in the company to Richard Caring, the textiles tycoon, in 2008.

That transaction valued the company at about £130m, with a subsequent takeover by Ron Burkle, a Californian supermarket billionaire, four years later attributing a £250m price tag to Soho House.

Both Mr Jones and Mr Caring have remained as shareholders since then‎, with the former continuing to run the business as its chief executive.

Financial results published last autumn revealed that its global membership base stood at 67,000, with tens of thousands ‎more on its waiting lists.

Profits at Soho House soared 23% to £31.7m in 2016, according to some media reports, with revenues up by a similar margin to £273.6m.

Turnover jumped again in the first half of 2017 by 28%, buoyed by new openings.

Soho House's rapid growth has not been without financial strain, however.

Credit ratings agencies have warned about the scale of its borrowings, with huge sums required to finance its relentless growth.

Last year, Soho House agreed a £375m refinancing with Permira Debt Managers, which replaced its existing borrowings and provided fresh funds for its club opening programme.

That deal coincided with the opening of The Ned, a 252-room hotel and club in the historic former Midland Bank headquarters in the City of London.

Earlier this week, the original Soho House on Greek Street in London's Soho reopened after a two-year refurbishment and expansion.

Banking sources said the company ‎had chosen New York as the listing venue because the US was a key market for future expansion.

A spokesman for So‎ho House declined to comment this weekend.