Upscale Restaurant Groups Should Avoid the IPO


Skift Take

Though fast casual IPOs have had notable success, a Soho House IPO will likely not happen at all. Knowing this, Soho House should abandon its IPO ambitions, and instead reinvest in service and training — not just new clubs.

Nick Jones, the founder of Soho House, has put on hold plans for an initial public offering of the membership club-slash-restaurant brand after nine months of testing the waters. Jones' network of private clubs was founded in 1995 and is currently (though perhaps temporarily) unprofitable as it shoulders the costs of expansion. The company is planning to open as many as five new houses a year in cities around the globe (with sights set on Paris, Milan, Rome, Lisbon, Austin, and Nashville). “We are well on our way to becoming the first global club,” the entrepreneur recently told the Financial Times. Meanwhile, chief financial officer Peter McPhee reported a loss before tax of $76 million (£60 million) last year. Clearly, capital for expansion is necessary. When asked whether an initial public offering was being considered both Jones and McPhee said it remains a possibility. But isn't growth antithetical to the kind of exclusivity Soho House promises? Shareholders Vs. Tastemaker