Soho House hits back after damning GlassHouse research report

12 February 2024 by
Soho House hits back after damning GlassHouse research report

Soho House has released a statement rejecting a report published by GlassHouse Research last week that claimed the business was worthless.

The report claimed that Soho House has a target price of zero, but the private members' club has responded saying the report is an attempt to drive down the company's share price to benefit from short selling.

The report, titled 'Soho House & Co: A company facing an existential crisis', claimed it was a "company with a broken business model and terrible accounting" that faced "material headwinds regarding its future viability as a public company".

GlassHouse Research claimed it seeks out companies with generally accepted accounting principles (GAAP) (or worse, non-GAAP) earnings that deviate from their true economic earnings and pointed to "overcrowding concerns and a decline in service quality" at Soho House, which "was never profitable in its 28-year history".

Soho House published a statement on Friday saying it fundamentally rejects the report, 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 private members' club, which is known for its complex application process, said it had not been contacted for comment or clarification prior to the report being released.

It continued that it is confident in the strength of its business and is focused on executing its strategy and that it expects its 2023 financial results, due on 6 March, to be in line with guidance issued at the end of last year.

In 2023 Soho House founder Nick Jones wrote a letter to members saying he was focusing on improving service, including making sure its houses "don't feel too busy". As a result, the company said it was going to stop accepting new members to its clubs in London, New York and Los Angeles, only accepting new members in locations where it has capacity.

Jones stepped down as chief executive of Soho House in 2022 after recovering from prostate cancer. He said this had given him the space to focus on the clubs and feedback. He told members that more improvements are on the way.

Soho House was founded by Jones in London in 1995 to act as a hub for people working in the creative industries. It now runs nine private members' clubs in London, where annual membership costs £2,750 a year, and in more than 50 locations worldwide, including hotels and co-working spaces.

Photo: © White City House

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