The famous celebrity hotspot Soho House has accused analysts of launching a share ruse to rake in millions – by claiming the prestigious venues are ‘overcrowded’.
Soho House – where the likes of Taylor Swift, Margot Robbie and Leonardo DiCaprio often visit – is embroiled in a row after a financial analyst’s report said it has expanded its notorious exclusive membership too quickly.
The report by GlassHouse Research claimed the result was a ‘decline in service quality’ with ‘longer wait times’ and reduced ‘personalised attention’.
It concluded that the value of the company after 28 years of losses ‘is a zero’.
But the private members’ club hit back, claiming the report was inaccurate and ‘misleading’.
The company said the report was deliberately negative in an attempt to drive down the club’s share price so that GlassHouse could benefit from short-selling.
Ellie Goulding, Sir Mick Jagger and Taylor Swift attend the Universal Music Brits party hosted by Bacardi at The Soho House Pop-Up in 2015
Maya Jama, Annie Mac and Nick Grimshaw attend the Universal Music BRIT Awards After Party 2019 hosted by Soho House
Soho House at 76 Dean Street, London, United Kingdom
Soho House founder Nick Jones issued a letter to members to say he was working on ‘making sure our houses don’t feel too busy’
GlassHouse and the authors of the report confirmed they were short-sellers of Soho House.
Short-selling is a when investors borrow a company’s shares to sell, hoping that the price will fall so they can buy them back at a cheaper price before being returned to their original owner.
The 31-page report titled ‘Soho House & Co: A company facing an existential crisis’, described the club as a company with a ‘broken business model and terrible accounting’.
After it’s publication, the company’s share price went down by 30 per cent, The Times reported.
It read: ‘Eerily similar to WeWork’s public offering, we believe SHCO will eventually meet the same fate as the now defunct co-working space.’
The report pointed to a ‘persistent lack of profitability’, issues with ‘overcrowding’, and a ‘perceived decline in service quality’.
Some of the concerns raised in the report were echoed by former members of the club.
The Times reported that one member of the prestigious club let his membership lapse because it was now ‘the All Bar One of members’ clubs’ and it was ‘opening their doors to everybody’.
The newspaper said that another former member said the clubs were ‘overwhelmed’ and it is ‘hard to get decent service’.
Soho House was established in 1995 for ‘creatives’ in London by Nick Jones, a British entrepreneur.
Full membership, with access to every venue across the world, costs nearly £3,000 a year.
Membership to one club starts at £850 but rises to above £1,000 for many, depending on the location.
Venues boast swimming pools, spas, gyms and even bedrooms.
Andrew Carnie, chief executive officer, at Soho House Dean Street in London
Accessing pool beds during summer months can be challenging for members, who complain of over-crowding at the clubs
DUMBO House boasts expansive views of NYC from the rooftop pool
There have been complaints on TikTok about how busy Soho House clubs are
The application process is comprehensive, requiring prospective members to provide a biography, explain what they can contribute and whether they already know existing members.
The club has a membership committee of those who already have access which make the call on who may join.
Membership at the venues is famously exclusive – however the club’s accounts revealed the extent to which membership has expanded in recent years.
In October, it reported more than double the amount of members than it had prior to the pandemic – the equivalent of 6,000 members for every venue.
Nick Jones announced in December that the chain would close new member applications for London, LA and New York for 2024.
The GlassHouse report reads: ‘Members also raised concerns about a decline in service quality at Soho House properties. Reports suggest that rapid member expansion may be stretching the company’s operational capabilities thin, leading to longer wait times, reduced personalised attention and an overall diminishing standard of service. As a result, the company recently halted new memberships at some of its prime locations.’
But in a statement hitting back at the scathing GlassHouse report, Soho House said: ‘Soho House & Co Inc. fundamentally rejects the recent report published by GlassHouse Research, which contains factual inaccuracies, analytical errors, and false and misleading statements, all designed to adversely impact the Company’s stock price for the benefit of the short-seller.
‘ The Company is confident in the strength of its business and is focused on executing its strategy.
An exterior view of the celebrity hotspot SoHo House in Manhattan
Soho House announced it will stop accepting new members at its clubs in New York City , Los Angeles and London following complaints they have become overcrowded
The interior of Soho House at 76 Dean Street in London
‘The Company also announces that in the fall of 2023, the Board formed an independent Special Committee of the Board to evaluate certain strategic transactions, some of which may result in the Company becoming a private company.
‘No assurances can be given that the Special Committee’s assessment will result in any change in strategy, or if a transaction is undertaken. The Special Committee has engaged legal and financial advisors to assist it with its review.’
Founder Nick Jones sent a letter to members in December 2023 to say he was working on ‘making sure our houses don’t feel too busy.’
He wrote: ‘For that reason, next year we’re closing the doors to new members across our houses in London, New York and Los Angeles, and will only be accepting members in locations where we have capacity,’ he wrote.
Between October 2022 and 2023, the company took on 21 percent more people.
It had 184,542 members by October 1, which is a huge jump from 118,000 just two years ago.
There have been complaints on TikTok about how busy Soho House clubs are, and how poor the service can be.
An Instagram account called Soho House Memes has 120,000 followers and it captioned one post: ‘Love it when £200 leaves my bank account then I’m told to wait four hours for a table at 3pm.’
The New York location was once featured in an episode of Sex and the City, when Samantha Jones, unable to get off the waiting list, posed as a member to gain pool access for her and her friends.
Prince Harry and Meghan Markle had their first date at a Soho House restaurant in London in July 2016.
Founder Jones stepped down from the day-to-day running of the company late last year as he recovered from cancer.
He said he has been ‘spending a lot more time in our houses’ as he has the ‘space to focus more attention on the clubs themselves.’
Soho House previously paused new memberships during the coronavirus pandemic to allow people to socially distance at its clubs.
There was also an effort to cull some members to capture its founding spirit and attract more creatives.
The company announced it was purging 1,000 members in 2010 from its New York house with Jones saying he was ‘trying to get the club back to its creative roots.’
‘When I went there, it didn’t have the right feel anymore. It has always been a creative, friendly place with a relaxed feel,’ he said.
‘If there are too many corporate types around then that atmosphere doesn’t occur.’