👉 Background: Soho House began in London in 1995 as a private members’ club for creatives where members go to work, and it's developed a reputation for being ultra-exclusive and ultra-expensive. In 2021, Soho House listed on the New York Stock Exchange with a valuation of $2.8 billion USD. But since then, its shares have fallen 45% and its pretty much exclusively lost money.

‍👉 What happened: In 2021, Soho House listed on the New York Stock Exchange at a valuation of $2.8 billion USD. But since then, its shares have fallen 45% and its pretty much lost money each quarter. Now, Soho House is going private again to arrest the declining share price.

‍👉 What else: Soho House's CEO and hotel behemoth MCR will purchase the business in $2.7 billion USD deal, including debt. Because not every business is built for the pressure of public markets.

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‍What's the key learning?

‍💡Exclusivity sells… until you try to scale it. One of the trickiest balancing acts in business is for companies to maintain exclusivity while still chasing growth. Many luxury brands, private clubs, and high-end services rely on scarcity and that status helps them attract their clientele.

💡But once investors come into play, there’s pressure to expand - more members, more locations, more revenue. And once you try to turn exclusivity into mass appeal, the shine can often wear off.

💡Michael Kors struggled with the same issue. It started as a high-end luxury fashion label but in the 2010s it pursued aggressive growth. Since then, Michale Kors has actually gone backwards, and its revenue has fallen 25% compared with the same quarter five years ago. So while Soho House has scaled to over 270,000 members and 46 clubs, it has come at a cost to its market value.