WeWork doesn’t work, says Dorfman

SIR Lloyd Dorfman, the former owner of The Office Group, has forecast more pain ahead for its American rival WeWork, calling it ‘over-hyped and over-valued’.

WeWork suffered a spectacular fall from grace after a failed $47 billion (£36 billion) stock market float led to a bailout in October by Japanese firm SoftBank, valuing it at $8 billion (£6.2 billion).

Dorfman, who still has a 10 per cent stake in The Office Group, said he expects more trouble for WeWork.

‘[SoftBank] have put in, in total, around $18 billion (£14 billion). I don’t see how they’re ever going to create value to make it worth that again so I think there’s probably more pain to come,’ he said.

WeWork’s shared office spaces are known for having craft beers and prosecco on tap plus ping pong tables and giant beanbags for ‘brain breaks’.

Dorfman said: ‘I don’t know what they thought they were doing. At the end of the day, it’s the same business we know and understand. All that hype and free beer and kumbaya and community, whatever.

‘I don’t know how that can be worth $47 billion when you’re losing $2 billion a year. As for all that happy-clappy stuff in the prospectus, if you’re a hardened analyst or investment manager you’re not going to buy into that.’

Dorfman sold a majority stake in The Office Group to Blackstone in 2017, valuing the firm at £500 million. Under its new private equity owners, the business has expanded to around 40 buildings in the UK, and also grown overseas.