Lionel Laurent, Columnist

Soho House Membership Is Closer than You Think

Adventurous IPO plans raise the risk of brand dilution.

February 5, 2018 at 2:31 PM UTC

Lionel Laurent is a Bloomberg Opinion columnist writing about the future of money and the future of Europe. Previously, he was a reporter for Reuters and Forbes.

1517838076_GettyImages-541080057 — Photographer: llstein bild via Getty Images

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Everyone knows Groucho Marx's old gag about refusing to belong to any club that would have him as a member. Here's a 21st-century twist: An exclusive club that usually snubs financiers now wants their help to take it public.

Soho House is mulling a 1.4 billion-pound ($2 billion) IPO, according to Sky News. That would put it on the way to becoming the restaurant equivalent of luxury group LVMH or Kering. But that reported valuation -- about five times 2015 revenue, according to Moody's -- looks pricey, considering the firm's indebtedness and its ambitions to put a club on almost every posh street corner. Exuberant growth and strained finances risk leading to decisions that dilute the brand.