Members only
Enjoying privilege at Soho House
Good morning, patrons of prestige. This is your Stock Market Rundown for May 3rd, 2024. Thanks for joining me today. Let’s get into it:
TODAY’S TOP STORY: ELITE EXHAUSTION
Exclusive private club Soho House went public in 2021, but just three years later, they’re regretting it more than a third gin martini at lunch.
The business, which operates 43 “houses” worldwide, lets members hang out in cozy club lounges, recline poolside, and book lodging at discounted rates. Membership is restricted to those who work in the “creative” industries—think fashion, media, and the arts.
Not welcome behind the velvet rope: lawyers, investment bankers, and accountants. (Hey, accountants can be creative too—ever heard of Enron?)
But despite the sparkling chandeliers, orchid arrangements, and membership price tag of up to $5,000 a year, Soho House has never turned a profit. Now, aggressive global expansion from Sao Paolo to Portland has the balance sheet overloaded by debt. That’s tanked the stock—it’s down by more than half since the IPO.
Worse yet, the growth push risks diluting the “cool factor” for a business whose allure is based on exclusivity. Members have been whining that the clubs are too crowded, and service standards have slipped. (Despite this, there are still tens of thousands of people on the waiting lists to join.)
Look, I get that they don’t want us finance types as members… but think about it. Why pay thousands of dollars to drink $18 Aperol Spritzes with C-list celebrities, when you could hit the local pub and shotgun Bud Lights while playing Golden Tee?
SO WHAT ELSE IS GOING ON?
The only thing Americans are swiping faster than Tinder is their credit cards. Visa is forecasting double-digit revenue growth as US consumers kept cash registers ringing.
Oilfield services firm Baker Hughes reported a strong quarter thanks to rising global rig counts, as higher oil prices turned drilling into dollar signs.
Kimberly-Clark—the makers of Kleenex and Cottonelle—wiped away the competition this quarter, on resilient demand for its household and personal-care products.
Homebuilder Pulte Group beat estimates thanks to a strong new-construction market. Stand beside an empty lot for too long, and these guys will probably start pouring foundation and asking whether you want a fireplace in the solarium.
And we're done for the week, respected peers. Have yourselves a fantastic weekend, and I’ll see you back here first thing Monday morning. Yours in capitalism, The Axe
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