Soho House eyes further clubs
SOHO House will push on with a planned expansion after dismissing its failure to refinance in the bond markets as a “blip”.
Nick Jones, the chief executive, said he was aiming to open three sites a year, which are all member-only clubs targeted at people in the creative industries. This plan remained steadfast even after its failed attempt to re-tap the bond markets in 2015, he said. Two years ago the company was looking to refinance a £145m 2018 bond which was paying 9pc interest with a new £200m five-year issuance, but the deal was pulled, prompting a series of rating agency downgrades.
Investors were concerned that revenue growth was rising fast but not as quickly as the costs of its capital expenditure plans.
But the company, founded in 1995 with one club in London, earlier this year secured £275m of funding from Permira Debt Managers, previously an investor in the company’s bonds. This means it will plough on with plans to enter India next year with a Mumbai “house”. Further houses will also open in New York and LA next year while in London its 40 Greek Street site will reopen in January and a new site at the former BBC premises in White City will appear in 2018.
“Not getting the bond away was an unfortunate blip but we recovered very quickly,” Mr Jones said. Permira came to them to offer funding at a “considerably cheaper” rate than what the bond would have been, he said.