Soho House executive chairman: 'It's hard to read that we aren't profitable'
Ron Burkle, executive chairman of the Soho House board, has addressed rumours that the group will return to being a private company, writing to shareholders "it's hard to read that we aren't profitable when our houses are very profitable".
It has been reported that investment firm CC Capital is in talks to take ownership of the members' club after a report published by Wall Street short sellers GlassHouse Research claimed the business, which listed on the New York Stock Exchange in 2021, was a "company with a broken business model and terrible accounting".
In a letter to shareholders Burkle said: "Public companies always have a tug of war over short-term versus long-term profits. I'd again emphasise that this (to me) should be about value creation more than anything.
"Today Soho House is a public company. The board and its affiliates alone controls approximately 75% of the stock, there aren't many shares in the public's hands."
Addressing the report's assertion that the business failed to deliver returns, he added: "It's hard to read that we aren't profitable when our houses are very profitable and create tremendous long-term value as an in-place network.
"I feel the real focus should be on mature houses that are in their second five-year period of their growth curve, when the profitability and durability of the units really kicks into gear."
While confirming that an independent special committee was assessing the fairness of any proposal to take Soho House private, Burkle played down the significance of any privatisation of the company. He said: "We have bought back so much of the small float that at today's stock price the company can almost go private without any of us writing a check."
Soho House was founded by Nick Jones in London in 1995 to act as a hub for people working in the creative industries. He stepped down as chief executive in 2022 after recovering from prostate cancer.
The business now includes nine private members' clubs in London, where annual membership costs £2,750 a year, and hotels and co-working spaces in more than 50 locations worldwide.
