A PRIVATE CLUB'S VERY PUBLIC PROBLEMS

Soho House faces feuding billionaires, a takeover offer and complaints about waiting ages to order a drink

- BY SARA ASHLEY O'BRIEN, BEN GLICKMAN AND ASHLEY WONG

SOHO HOUSE STARTED its life in London in 1995 as a private members club for the artsy elite. Eight years later, it brought its exclusive formula of gathering designers, musicians and writers in perfectly worn velvet club chairs to New York. Then after a 2021 public offering, it opened up in 11 other cities around the world.

Today, as two billionaires wage war over the club's future, it is learning an unusual lesson: It's very hard to be a public private club.

ThirdPoint hedge fund founder Dan Loeb, one of the fiercest activist investors on Wall Street, has a 10% stake and is pushing for new leadership and a high takeover bid. Its top shareholder, supermarket magnate Ron Burkle, is connected to a $1.7 billion buyout offer to go private. A short-seller firm criticized the club's practice of doling out food and drink tokens and alleged some accounting issues.

The challenge for Soho House is that its focus on growth, to some members, feels like it comes at the cost of its exclusivity. Several members of its older clubs have said the quality of service has declined and that it appears to have gotten too easy to get in. At its flagship U.S. location in Manhattan's meatpacking district, where "Sex and the City's Carrie Bradshaw was once turned away from the sexy rooftop pool, families with small children now make up the brunch crowd downstairs.

Soho House has over 200,000 members-its ranks climbed by more than 70% in the four years since it went public, and there are another 111,000 on a wait list. It has grown to 45 club locations from 26 in 2019, opening in cities ranging from Portland, Ore., to Bangkok and Stockholm.

Soho House says it has never lost its exclusive vibe.

It points out that its membership growth came mostly from opening new clubs in new cities, not from adding members to older ones. Its members have mostly stayed members: The club's retention rate was 91.5% in 2023.