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Wed 16th Nov 2022 - Nick Jones to step down as CEO of Soho House owner, business slows down expansion plans
Nick Jones to step down as CEO of Soho House owner, business slows down expansion plans: Membership Collective Group (MCG), the New York-listed company behind the Soho House chain of members’ clubs, has announced Nick Jones is to step down as chief executive while the business is slowing down its expansion plans. Jones will be succeeded by current president Andrew Carnie. The company said the change follows conversations between Jones, executive chairman Ron Burkle and the board regarding long-term succession plans for the company and Jones’ recent diagnosis and successful recovery from prostate cancer. Jones has led the company’s growth since founding Soho House as a single location in London in 1995, to a global membership platform of 38 Soho Houses and associated brands. He will continue with MCG in a founder role, “focused on designing beautiful spaces that are synonymous with the brand and making the membership experience even better for the company’s 211,000 members globally”. Jones said: “Over the last 27 years, I have run Soho House and more recently MCG by always putting members at the heart of everything we do. I am so proud of what we have achieved and grateful to all the teams who have helped us get to where we are today. With an experienced and talented leadership team in place, it’s the right time for me to step down as chief executive and spend more time doing what I love: designing new houses, creating a fantastic membership experience and motivating our people. Having worked closely with Andrew for nearly four years and seen his passion and expertise, I am confident MCG will go from strength to strength under his leadership and I look forward to working with him and the rest of the team to help support that success.” Burkle added: “Nick’s vision has created and scaled a membership platform unlike any other. We are extremely thankful for his longstanding energy and commitment as chief executive and look forward to his continued inspiration and involvement as founder. We have been working diligently behind the scenes to ensure a smooth transition and are confident in the company’s leadership moving forward.” Carnie said: “Soho House is an iconic brand set apart by its longevity, unique design aesthetic and incredible member loyalty. I am excited to be stepping into the role of chief executive and continuing to add value to our members’ experience, while driving the profitability of the business and seizing the potential ahead of us. I’m extremely thankful for Nick’s mentorship and look forward to the continued partnership with him and Ron to successfully deliver on the vision for our members, our teams and our shareholders.” Carnie has served as president of MCG since September 2020, prior to which he held the position of chief commercial officer from June 2019 to September 2020. Prior to joining Soho House, Andrew held a series of leadership positions including global president at Anthropologie in North America where he successfully grew its home and interiors business, digitised the brand and led the international expansion into Europe and China. The change in leadership comes as the company said its total members grew to 211,351 in the three months to 2 October from 193,370 in the second quarter of 2022 and 46.3% year-on-year. It said Soho House members grew to 152,165 from 142,250 in the second quarter of 2022, and 29.3% year-on-year. It said its membership waitlist now sits at an all-time high of circa 85,000 and retention rates continue at pre-pandemic levels. Total revenues for the quarter stood at $266m, marking 48.2% year-on-year growth, while adjusted Ebitda was $20.3m, up $11.4m from the third quarter of 2021. Membership revenues in its third quarter were $71m, up 38.8% year-on-year, accounting for 26.7% of total revenues. In-house revenue grew to $108.5m, up 62.3% year-on-year, while it said revpar was 18.2% higher year-on-year on a like-for-like basis. Net losses in the quarter stood at $91.6m (2021: ($77.0m). The company said: “While inflationary pressures persist during 2022, we have been able to offset some through pricing power and continued improvements in our purchasing across food and beverage. For example, food and beverage cost of sales ratios have improved 120 basis points versus the third quarter of 2019. We continue to see inflationary pressures and are recalibrating expenses to better match member behaviour and utilisation. We are refocusing our general and administrative spending on membership growth and experience, with target reductions on content, digital and other corporate functions without impacting the member experience.” Soho House Balham and Copenhagen opened in the quarter. Jones said: “The key demand drivers of our business continue to remain strong, with Soho House members growing almost 30% year-on-year to more than 152,000, and revenues for the group up almost 50% in the quarter. Our expectations for strong revenue growth and membership this year remain unchanged. Given the continued appeal in Soho House, we expect to reach 190,000 Soho House members by the end of 2023. However, we have lowered our Ebitda guidance to reflect costs and the foreign exchange. Looking ahead, to reduce pressure on the business and give our members the best experience as we open, we are returning to our original target of five to seven new houses a year, reflective of our current signed pipeline until 2025. This includes delaying Mexico City and Bangkok to 2023. By prioritising the business against what our members value and putting initiatives in place to operate more efficiency, we expect to achieve more than 10% Ebitda margins in 2023.”


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