Soho House Chairman Addresses Speculation on Company’s Profitability

Ron Burkle, the executive chairman of the Soho House board, has responded to speculation about the group’s potential return to private ownership, expressing difficulty in accepting claims of non-profitability despite the evident success of their establishments.

Reports have surfaced suggesting that investment firm CC Capital is considering taking control of the members’ club, prompted by allegations from Wall Street short sellers GlassHouse Research that the business, which went public on the New York Stock Exchange in 2021, suffers from a “broken business model and problematic accounting practices.”

In a letter to shareholders, Burkle acknowledged the perpetual struggle between short-term and long-term profits within public companies, emphasizing the importance of creating value above all else. He highlighted the fact that Soho House, while now public, is largely controlled by the board and its affiliates, limiting the influence of public shareholders.

Regarding claims of unprofitability, Burkle countered by pointing out the considerable success and enduring value generated by Soho House establishments, particularly as a network of established properties enters a phase of sustained profitability.

While confirming the formation of an independent special committee to evaluate any potential privatization offer, Burkle downplayed the significance of such a move, noting that the company has already repurchased a significant portion of its publicly traded shares, making privatization a feasible option without substantial financial investment from stakeholders.

Founded by Nick Jones in London in 1995 as a creative industry hub, Soho House has since expanded to include nine exclusive members’ clubs in London, hotels, and co-working spaces across more than 50 global locations.