Soho House Owner Falls in Trading Debut After Low-End IPO
(Bloomberg) -- Membership Collective Group Inc., the company behind the trendy Soho House members clubs, fell 9.6% in its trading debut after raising $420 million in an initial public offering priced at the bottom of a marketed range.
The shares, which sold for $14 each in the IPO, closed Thursday at $12.66 in New York, giving the company a market value of $2.5 billion. Membership Collective, which owns 28 Soho House clubs around the world, on Wednesday sold 30 million shares after marketing them for $14 to $16.
Founded in 1995 in London’s Soho district as a venue for executives in the creative industries, the group now has about 119,000 members, according to its filings. New ventures including the Ned, the vast hotel and restaurant complex in the heart of the City of London, have broadened its appeal to other groups including finance workers.
The company’s portfolio also includes nine workspaces in London, Los Angeles and New York and home-decor retailer Soho Home.
Coronavirus pandemic lockdowns hit the company hard, with revenue slumping to $384 million in the fiscal year ended Jan. 3 from $642 million a year earlier, according to its filings with the U.S. Securities and Exchange Commission.
Still, total membership revenue grew during the period as sign-ups across other brands helped offset a small decline in Soho House customers. The company, which hasn’t turned a profit, lost $93 million in the 13 weeks ended April 4, compared with $45 million for the equivalent period a year ago.
As of early April, the company had $826 million in debt, which it plans to pay down using the IPO proceeds.
Membership Collective is majority owned by Ron Burkle’s Yucaipa Cos., which will continue to control the company. Founder and Chief Executive Officer Nick Jones owns a minority stake, as does board member Richard Caring, who first invested in 2008.
Jones said in a Bloomberg TV interview that Membership Collective is opening locations in Paris, Rome and Tel Aviv within three months and that he expects the company to turn a profit within a few years.
“We think we’re coming out of Covid in a very good position,” Jones said. “We think there’s a lot of exciting growth opportunities.”
The company set aside a portion of its IPO shares for its employees and members in the U.K. and the U.S. in a program it’s calling the “Community Offer.”
The offering was led by JPMorgan Chase & Co., Morgan Stanley and Bank of America Corp. The shares are trading on the New York Stock Exchange under the symbol MCG.
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