MEMBERSHIP COLLECTIVE GROUP INC., 10-K filed on 3/8/2023
Annual Report
v3.22.4
Cover Page - USD ($)
$ in Thousands
 12 Months Ended
Jan. 01, 2023
Mar. 06, 2023
Jul. 01, 2022
Document Information [Line Items]      
Document Type 10-K    
Document Period End Date Jan. 01, 2023    
Document Fiscal Year Focus 2023    
Document Fiscal Period Focus FY    
Current Fiscal Year End Date --01-02    
Amendment Flag false    
Entity Registrant Name Membership Collective Group Inc.    
Entity Central Index Key 0001846510    
Entity Incorporation, State or Country Code DE    
Securities Act File Number 001-40605    
Document Transition Report false    
Document Annual Report true    
Entity Voluntary filers No    
Entity Tax Identification Number 86-3664553    
Entity Well-known Seasoned Issuer No    
Entity Address, Address Line One 180 Strand    
Entity Address, City or Town London    
Entity Address, Postal Zip Code WC2R 1EA    
Entity Address, Country GB    
City Area Code 207    
Local Phone Number 8512 300    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company true    
Entity Ex Transition Period false    
ICFR Auditor Attestation Flag false    
Entity Shell Company false    
Trading Symbol MCG    
Security Exchange Name NYSE    
Title of 12(b) Security Class A Common Stock, par value $0.01 per share    
Entity Public Float     $ 368,445,641
Entity Common Stock, Shares Outstanding   195,539,995  
Auditor Firm ID 1295    
Auditor Name BDO LLP    
Auditor Location London, United Kingdom    
Documents incorporated by reference

Portions of the Registrant's definitive Proxy Statement for the Registrant's 2023 Annual Meeting of Stockholders are incorporated by reference into Part III of this report. The Registrant expects to file such proxy statements within 120 days after the end of its fiscal year.

   
Common Class A [Member]      
Document Information [Line Items]      
Entity Common Stock, Shares Outstanding   54,039,610  
Common Class B [Member]      
Document Information [Line Items]      
Entity Common Stock, Shares Outstanding   141,500,385  
v3.22.4
Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands
Jan. 01, 2023
Jan. 02, 2022
Current assets    
Cash and cash equivalents $ 182,115 $ 212,833
Restricted cash 7,928 7,829
Accounts receivable, net 42,215 19,338
Inventories 57,848 29,697
Prepaid expenses and other current assets 91,101 57,004
Total current assets 381,207 326,701
Property and equipment, net 647,001 684,961
Operating lease assets 1,085,579 996,991
Goodwill 199,646 214,257
Other intangible assets, net 125,968 132,158
Equity method investments 21,629 23,621
Deferred tax assets 295 446
Other non-current assets 6,571 2,348
Total non-current assets 2,086,689 2,054,782
Total assets 2,467,896 2,381,483
Current liabilities    
Accounts payable 80,741 71,497
Accrued liabilities 84,112 63,127
Current portion of deferred revenue 91,611 76,866
Indirect and employee taxes payable 38,088 25,289
Current portion of debt, net of debt issuance costs 1,005 6,923
Current portion of related party loans 24,612 21,661
Other current liabilities 36,019 29,045
Total current liabilities 395,800 329,763
Debt, net of current portion and debt issuance costs 579,904 459,343
Property mortgage loans, net of debt issuance costs 116,187 115,122
Finance lease liabilities 76,638 72,582
Financing obligation 76,239 75,802
Deferred revenue, net of current portion 27,118 27,518
Deferred tax liabilities 1,666 1,856
Other non-current liabilities 256 975
Total non-current liabilities 2,087,472 1,869,528
Total liabilities 2,483,272 2,199,291
Commitments and Contingencies (Note 18)
Shareholders' equity    
Class A common stock, $0.01 par value, 1,000,000,000 shares authorized, 62,189,717 shares issued and 53,722,597 outstanding as of January 1, 2023 and 61,029,730 issued and outstanding as of January 2, 2022; Class B common stock, $0.01 par value, 500,000,000 shares authorized, 141,500,385 shares issued and outstanding as of January 1, 2023 and January 2, 2022 2,037 2,025
Additional paid-in capital 1,213,086 1,189,044
Accumulated deficit (1,242,412) (1,021,832)
Accumulated other comprehensive income 54,853 6,897
Treasury stock, at cost; 8,467,120 shares as of January 1, 2023 (50,000) 0
Total shareholders' equity attributable to Membership Collective Group Inc. (22,436) 176,134
Noncontrolling interest 7,060 6,058
Total shareholders' equity (15,376) 182,192
Total liabilities and shareholders' equity 2,467,896 2,381,483
Sites Trading Less Than One Year [Member]    
Current liabilities    
Current portion of operating lease liabilities 4,176 842
Operating lease liabilities, net of current portion 227,158 174,469
Sites Trading More Than One Year [Member]    
Current liabilities    
Current portion of operating lease liabilities 35,436 34,513
Operating lease liabilities, net of current portion $ 982,306 $ 941,861
v3.22.4
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares
Jan. 01, 2023
Jan. 02, 2022
Treasury Stock Shares 8,467,120  
Common Class A [Member]    
Common stock, Par value $ 0.01 $ 0.01
Common stock, Shares authorized 1,000,000,000 1,000,000,000
Common stock, Shares issued 62,189,717 61,029,730
Common stock, Shares outstanding 53,722,597 61,029,730
Common Class B [Member]    
Common stock, Par value $ 0.01 $ 0.01
Common stock, Shares authorized 500,000,000 500,000,000
Common stock, Shares issued 141,500,385 141,500,385
Common stock, Shares outstanding 141,500,385 141,500,385
v3.22.4
Consolidated Statements of Operations - USD ($)
$ in Thousands
 12 Months Ended
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Revenues      
Total revenues $ 972,214 $ 560,554 $ 384,376
Operating expenses      
In-House operating expenses (exclusive of depreciation and amortization of $46,386, $46,386, and $36,278 for the fiscal years ended January 2, 2022, January 3, 2021, and December 29, 2019, respectively) (524,929) (308,840) (220,036)
Other operating expenses (exclusive of depreciation and amortization of $23,416, $23,416, and $20,861 for the fiscal years ended January 2, 2022, January 3, 2021, and December 29, 2019, respectively) (250,336) (167,152) (109,251)
General and administrative expenses (123,435) (89,383) (74,954)
Pre-opening expenses (14,081) (21,294) (21,058)
Depreciation and amortization (99,930) (83,613) (69,802)
Share-based compensation (27,681) (26,660) (2,618)
Foreign exchange loss (gain), net (69,600) (25,541) [1] 3,354
Other (9,703) (26,097) (44,741)
Total operating expenses (1,119,695) (748,580) (539,106)
Operating loss (147,481) (188,026) (154,730)
Other (expense) income      
Interest expense, net (71,499) (84,382) (77,792)
Gain (loss) on sale of property and equipment 390 6,837 98
Share of income (loss) of equity method investments 3,941 (2,249) (3,627)
Total other expense, net (67,168) (79,794) (81,321)
Loss before income taxes (214,649) (267,820) (236,051)
Income tax (expense) benefit (5,131) (894) 776
Net loss (219,780) (268,714) (235,275)
Loss attributable to noncontrolling interest (800) 3,319 6,814
Net loss attributable to Membership Collective Group Inc. $ (220,580) $ (265,395) $ (228,461)
Earnings Per Share [Abstract]      
Earnings Per Share, Basic $ (1.10) $ (1.88) $ (1.64)
Earnings Per Share, Diluted $ (1.10) $ (1.88) $ (1.64)
Weighted Average Number of Shares Outstanding, Basic 199,985 173,691 141,896
Weighted Average Number of Shares Outstanding, Diluted 199,985 173,691 141,896
Membership revenues [Member]      
Revenues      
Total revenues $ 272,809 $ 189,189 $ 176,910
In-House revenues [Member]      
Revenues      
Total revenues 426,602 217,934 126,774
Other revenues [Member]      
Revenues      
Total revenues $ 272,803 $ 153,431 $ 80,692
[1] Includes the effect of a prior-period error correction, as discussed in Note 2, Summary of Significant Accounting Policies – Basis of Presentation.
v3.22.4
Consolidated Statements of Operations (Parenthetical) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
In House Operating Expenses [Member]      
Operating cost and expenses $ 55,587 $ 53,568 $ 46,386
Other Operating Expenses [Member]      
Operating cost and expenses $ 30,262 $ 23,831 $ 23,416
v3.22.4
Condensed Consolidated Statements of Comprehensive Loss - USD ($)
$ in Thousands
 12 Months Ended
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Statement of Comprehensive Income [Abstract]      
Net loss $ (219,780) $ (268,714) $ (235,275)
Other comprehensive income (loss)      
Foreign currency translation adjustment 47,480 20,185 (13,283)
Comprehensive loss (172,300) (248,529) (248,558)
Loss attributable to noncontrolling interest (800) 3,319 6,814
Foreign currency translation adjustment attributable to noncontrolling interest 476 (31) (122)
Total comprehensive loss attributable to Membership Collective Group Inc. $ (172,624) $ (245,241) $ (241,866)
v3.22.4
Consolidated Statements of Changes in Redeemable Shares and Shareholders' Equity (Deficit) - USD ($)
$ in Thousands
Total
Soho House Holdings Limited SHHL [Member]
Redeemable Preferred Share [Member]
Soho House Holdings Limited SHHL [Member]
Redeemable Class C Common Stock [Member]
Soho House Holdings Limited Ordinary Shares [Member]
MCG Common Stock [Member]
Additional Paid-in Capital [Member]
Accumulated Deficit [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Treasury Stock [Member]
Total Shareholders' Deficit Attributable to Membership Collective Group Inc. [Member]
Noncontrolling Interest [Member]
Beginning Balance at Dec. 29, 2019 $ (181,969) $ 14,700 $ 67,416 $ 262,532 $ 0 $ 48,461 $ (528,642) $ 26   $ (217,623) $ 35,654
Net loss (235,275)           (228,461)     (228,461) (6,814)
Noncontrolling interest related to the Soho Restaurants Limited reorganization (Note 3) 2,095                   2,095
Distributions to noncontrolling interest (465)                   (465)
Contributions from noncontrolling interest 27,839                   27,839
Payment received for vested SHHL B ordinary shares 1,913         1,913       1,913  
Conversion of related party loan to SHHL A ordinary shares (Note 12) 22,412     2,649   19,763       22,412  
Issuance of SHHL redeemable C ordinary shares (Note 16)     94,000                
SHHL redeemable C ordinary shares issuance costs (Note 16)     (1,011)                
Issuance of senior convertible preference shares (Note 15) 0                    
Share-based compensation, net of tax (Note 14) 2,618         2,618       2,618  
Net change in cumulative translation adjustment (13,161)             (13,283)   (13,283) 122
Ending Balance at Jan. 03, 2021 (373,993) 14,700 $ 160,405 265,181 0 72,755 (757,103) (13,257)   (432,424) 58,431
Net loss (268,714)           (265,395)     (265,395) (3,319)
Distributions to noncontrolling interest (700)                   (700)
Contributions from noncontrolling interest 644                   644
Issuance of senior convertible preference shares (Note 15) 0 175,000                  
Senior convertible preference shares issuance costs (Note 15)   (13,426)                  
Non-cash dividends on senior convertible preference shares (Note 15) (4,335) 4,335       (4,335)       (4,335)  
Proceeds from issuance of SHHL redeemable C ordinary shares (Note 16)     47,000                
SHHL C2 ordinary shares issued in connection with the Cipura Acquisition (Note 3) 8,700     905   7,795       8,700  
SHHL C2 ordinary shares issued in connection with the Mandolin Acquisition (Note 3) 1,250     130   1,120       1,250  
Purchase of noncontrolling interests (Note 3) (8,803)     6,405   33,821       40,226 (49,029)
SHHL C2 ordinary shares issued in connection with the LINE and Saguaro Acquisition (Note 3) 25,645     2,644   23,001       25,645  
Accretion of redeemable preferred shares to redemption value, net of foreign currency remeasurement gain (Note 15) (5,197) 5,197       (5,863) 666     (5,197)  
Effect of the Reorganization Transactions (Note 1) 207,405   $ (207,405) (275,265) 1,564 481,106       207,405  
Issuance of common stock in connection with initial public offering, net of offering costs, underwriting discounts and commissions 387,538       306 387,232       387,538  
Conversion of senior convertible preference shares into Class A common stock 165,907 (165,907)     155 165,752       165,907  
Redemption of the May 2016 preferred shares (Note 15)   $ (19,899)                  
Share-based compensation, net of tax (Note 14) 26,660         26,660       26,660 0
Net change in cumulative translation adjustment 20,185             20,154   20,154 31
Ending Balance at Jan. 02, 2022 182,192     2,025 $ 2,025 1,189,044 (1,021,832) 6,897   176,134 6,058
Net loss (219,780)           (220,580)     (220,580) (800)
Distributions to noncontrolling interest (1,206)                   (1,206)
Issuance of senior convertible preference shares (Note 15) 0                    
Non-cash dividends on senior convertible preference shares (Note 15) 26,207         26,195       26,207  
Purchase of noncontrolling interests in connection with the Soho Restaurants Acquisition (Note 3) 0         (1,884)       (1,884) 1,884
Shares repurchased (Note 17) (50,000)               $ (50,000) (50,000)  
Non-cash share-based compensation (Note 14)         12,000            
Additional IPO costs (269)         (269)       (269)  
Net change in cumulative translation adjustment 47,480             47,956   47,956 (476)
Ending Balance at Jan. 01, 2023 $ (15,376)     $ 2,037   $ 1,213,086 $ (1,242,412) $ 54,853 $ (50,000) $ (22,436) $ 7,060
v3.22.4
Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 12 Months Ended
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Cash flows from operating activities      
Net loss $ (219,780) $ (268,714) $ (235,275)
Adjustments to reconcile net loss to net cash used in operating activities      
Depreciation and amortization 99,930 83,613 69,802
Non-cash share-based compensation (Note 14) 26,207 26,660 2,618
Deferred tax benefit 237 (273) (1,341)
(Gain) loss on sale of property and other, net (390) (6,837) 2,264
Share of (profit) loss of equity method investments (3,941) 2,249 3,627
Amortization of debt issuance costs 4,315 4,632 5,779
Loss on debt extinguishment (Note 12) 0 14,126 0
PIK interest (settled), net of non-cash interest 36,254 (57,634) 25,717
Imputed interest on interest free related party loans 0 0 1,608
Distributions from equity method investees 3,281 601 846
Foreign exchange loss (gain), net 69,600 25,541 [1] (3,354)
Guarantee provision 0 0 5,011
Changes in assets and liabilities:      
Accounts receivable (24,109) (5,860) 10,582
Inventories (31,029) (7,561) 6,966
Operating leases, net 25,190 26,973 42,702
Other operating assets (38,667) (19,379) (1,804)
Deferred revenue 20,131 27,251 3,297
Accounts payable and accrued and other liabilities 47,453 27,193 22,726
Net cash provided by (used in) operating activities 14,682 (127,419) (38,229)
Cash flows from investing activities      
Purchase of property and equipment (73,729) (90,812) (128,939)
Proceeds from sale of assets 926 0 0
Purchase of intangible assets (21,672) (12,270) (10,501)
Acquisition of subsidiaries, net of cash acquired (Note 3) 0 559 1,138
Acquisition of noncontrolling interests (Note 3) 0 (8,803) 0
Investments in equity method investees (Note 5) 0 (7,813) (1,568)
Property and casualty insurance proceeds received 338 0 0
Net cash used in investing activities (94,137) (119,139) (139,870)
Cash flows from financing activities      
Repayment of borrowings (Note 12) (736) (613,984) (819)
Payment for debt extinguishment costs (Note 12) 0 (9,109) 0
Issuance of related party loans 3,217 4,014 513
Proceeds from borrowings (Note 12) 105,795 465,948 55,112
Payments for debt issuance costs (1,860) (13,251) (904)
Proceeds from finance leases 0 0 104
Principal payments on finance leases (528) (281) (230)
Proceeds from financing obligation 0 0 3,652
Principal payments on financing obligation (1,578) (1,334) 0
Distributions to noncontrolling interest (1,206) (700) (465)
Contributions from noncontrolling interest 0 644 27,839
Payment received for vested SHHL B ordinary shares 0 0 1,913
Senior Convertible Preference Shares Issued Net Of Issuance Costs 0 161,574 0
Purchase of treasury stock, inclusive of commissions (Note 17) (50,000) 0 0
Proceeds from issuance of SHHL redeemable C ordinary shares, net of issuance costs (Note 16) 0 47,000 92,989
SHHL Redeemable preferred shares redeemed (Note 15) 0 (19,899) 0
Proceeds from initial public offering, net of offering costs (Note 1 and Note 2) (269) 387,538 0
Net cash provided by financing activities 52,835 408,160 179,704
Effect of exchange rate changes on cash and cash equivalents, and restricted cash (3,999) (910) 2,050
Net increase in cash and cash equivalents, and restricted cash (30,619) 160,692 3,655
Cash, cash equivalents and restricted cash      
Beginning of year 220,662 59,970 56,315
End of year 190,043 220,662 59,970
Supplemental disclosures:      
Cash paid for interest, net of capitalized interest 29,893 130,263 28,543
Cash paid for income taxes 585 310 1,697
Supplemental disclosures of non-cash investing and financing activities:      
Conversion of senior convertible preference shares to Class A common stock (Note 15) 0 165,907 0
SHHL C2 ordinary shares issued in exchange for acquisitions of businesses and noncontrolling interests (Note 3) 0 75,825 0
Conversion of related party loan to SHHL A ordinary shares (Note 12) 0 0 22,412
Operating lease assets obtained in exchange for new operating lease liabilities 133,743 170,105 67,235
Acquisitions of property and equipment under finance leases (Note 12) 12,315 0 0
Non-cash dividends on senior convertible preference shares (Note 15) 0 4,335 0
Accrued capital expenditures as of January 1, 2023, January 2, 2022, and January 3, 2021 $ 15,257 $ 6,422 $ 11,723
[1] Includes the effect of a prior-period error correction, as discussed in Note 2, Summary of Significant Accounting Policies – Basis of Presentation.
v3.22.4
Nature of the Business
 12 Months Ended
Jan. 01, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Nature of Operations
1.
Nature of the Business

 

Membership Collective Group Inc. (“MCG”) is a global membership platform of physical and digital spaces that connects a vibrant, diverse group of members from across the world. These members use the MCG platform to both work and socialize, to connect, create, have fun and drive a positive change. Our members engage with us through our global portfolio of 40 Soho Houses, 9 Soho Works Clubs, The Ned in London, New York and Doha, The Line and Saguaro hotels in North America, Scorpios Beach Club in Mykonos, Soho Home, our interiors and lifestyle retail brand, and our digital channels.

 

MCG was incorporated on February 10, 2021 under the laws of the State of Delaware. On July 19, 2021, we completed the initial public offering (“IPO”) of our Class A common stock pursuant to a Registration Statement on Form S-1 (File No. 333-257206). Immediately prior to the closing of the IPO, we completed the following reorganization transactions (the "Reorganization Transactions") which resulted in changes to our common stock and issued and outstanding shares:

•
affiliates of The Yucaipa Companies, LLC, and Messrs. Ron Burkle, Nick Jones, and Richard Caring exchanged their equity interests in our predecessor entity, Soho House Holdings Limited (“SHHL”), for 141,500,385 shares of Class B common stock having an equivalent value;
 
•
the other equity holders of SHHL exchanged their equity interests for 14,935,193 shares of Class A common stock having an equivalent value.

 

In the IPO, we sold 30,567,918 shares of Class A common stock at a public offering price of $14.00 per share, including 567,918 shares of Class A common stock sold pursuant to the underwriters’ partial exercise of a “greenshoe” option to purchase additional shares of common stock to cover over-allotments. Immediately after the IPO, the senior convertible preference shares of SHHL were converted into 15,526,619 shares of Class A common stock.

 

During periods preceding the IPO that are presented in these consolidated financial statements, our business was conducted through SHHL, a Jersey, Channel Islands private limited company, and its subsidiaries and joint ventures. As a result of the Reorganization Transactions, SHHL became a wholly-owned subsidiary of MCG. Such transactions were accounted for as a reorganization and, therefore, the consolidated financial statements of MCG in periods after the IPO recognize the assets and liabilities received in the Reorganization Transactions at their historical carrying amounts, as reflected in the historical financial statements of SHHL.

 

The consolidated entity presented is referred to herein as “MCG”, “we”, “us”, “our”, or the “Company”, as the context requires and unless otherwise noted
v3.22.4
Summary of Significant Accounting Policies
 12 Months Ended
Jan. 01, 2023
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies
2.
Summary of Significant Accounting Policies

 

Basis of Presentation

 

The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The preparation of the financial statements in conformity with US GAAP requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the periods presented. The Company's significant estimates relate to the valuation of financial instruments, equity method investments, the measurement of goodwill and intangible assets, contingent liabilities, income taxes, leases, long-lived assets and the expected breakage of house introduction credits. Although the estimates have been prepared using management's best judgment and management believes that the estimates used are reasonable, actual results could differ from those estimates and such differences could be material.

 

We operate on a fiscal year calendar consisting of a 52-or 53-week period ending on the last Sunday in December or the first Sunday in January of the next calendar year. In a 52-week fiscal year, each quarter contains 13 weeks of operations; in a 53-week fiscal year, each of the first, second and third quarters includes 13 weeks of operations and the fourth quarter includes 14 weeks of operations.

 

Our 2022 fiscal year ended on January 1, 2023 ("Fiscal 2022"), our 2021 fiscal year ended on January 2, 2022 ("Fiscal 2021") and our 2020 fiscal year ended on January 3, 2021 ("Fiscal 2020"). Fiscal 2022 was a 52-week year, Fiscal 2021 was a 52-week year and Fiscal 2020 was a 53-week year.

 

The consolidated statement of operations for Fiscal 2022 and the consolidated balance sheet as of Fiscal 2022 include the correction of an error related to the Company’s consolidated financial statements as of and for Fiscal 2021 and Fiscal 2020. The error, which was identified in fiscal 2022, relates to the correction of the estimation of the historical operating lease liabilities which resulted in the overstatement of historical operating lease liability and assets by $10 million and $5 million, respectively, as of Fiscal 2021; and $18 million and $13 million, respectively, as of Fiscal 2020. The correction of this error is presented within operating lease assets and operating lease liabilities in the consolidated balance sheet as of Fiscal 2022 amounting to $5 million and $10 million, respectively. The error also resulted in the overstatement of operating lease expenses, with a cumulative impact of $5 million for Fiscal 2021 and $5 million for Fiscal 2020. The correction of this cumulative error is presented within In-House operating expenses in the consolidated statement of operations for Fiscal 2022.

 

Certain prior period amounts have been reclassified to conform to the current period presentation with no impact on previously reported net loss or cash flows, and no material impact on financial position including in Note 21 Segments due to changes in assessed information for decision making purposes.

 

Going Concern

 

The accompanying consolidated financial statements of the Company have been prepared assuming the Company will continue as a going concern. The going concern basis of presentation assumes that we will continue in operation for at least a period of 12 months after the date these financial statements are issued, and contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

 

We have experienced net losses and significant cash outflows from cash used in operating activities over the past years as we develop our Houses. During the fiscal year ended January 1, 2023, the Company incurred a consolidated net loss of $220 million. During the fiscal year ended January 1, 2023, the Company had positive cash flow from operations of $15 million. As of January 1, 2023, the Company had an accumulated deficit balance of $1,242 million. As of January 1, 2023, the Company had a cash and cash equivalents balance of $182 million, and a restricted cash balance of $8 million.

 

In assessing the going concern basis of preparation of the consolidated financial statements for the fiscal year ended January 1, 2023, we have taken into consideration detailed cash flow forecasts for the Company, the Company’s forecast compliance with bank covenants, and the timing of debt commitments within 12 months of the approval of these financial statements, and the continued availability of committed and accessible working capital to the Company.

 

We have considered the current global economic and political uncertainties, specifically including inflationary pressures on consumables purchased and wages, as well as any further possible impacts from the COVID-19 pandemic and the Company has factored these in when it undertook an assessment of the cash flow forecasts covering a period of at least 12 months from the date these financial statements are issued. Cash flow forecasts have been prepared based on a range of scenarios including, but not limited to, no further debt or equity funding, repayment of existing short-term debt, macro-economic dynamics, possible temporary closures of our properties from any further impact of the COVID-19 pandemic (which impacts the Company’s ability to keep open Houses and maintain a level of operations consistent with pre COVID-19 times), cost reductions, both limited and extensive, and a combination of these different scenarios.

 

We believe that the completed working capital events, our projected cash flows and the actions available to management to further control expenditure (particularly in respect of timing of capital works and labor costs), as necessary, provide the Company with sufficient working capital (including cash and cash equivalents) to mitigate the impact of inflationary pressures and consumer confidences, subject to the following key factors:

•
the level of in-House sales activity (primarily sales of food and beverage) that, even after opening, may be subject to operational constraints connected with a re-emergence of any restrictions;
•
the continued high level of membership retention and renewals, together with members continuing their current spending patterns; and
•
the implementation, and timely deployment, of cost containment and reductions measures that are aligned with the anticipated levels of capacity.

 

Furthermore, available cash as a result of completed financing events, includes the exercising of an option on March 9, 2022 for issued additional notes under the existing senior secured notes for $100 million and available additional liquidity, and access to an undrawn revolving credit facility of £71 million ($86 million) (see Note 12, Debt, for additional information).

 

This, together with the Company’s wider sufficient financial resources, an established business model, access to capital and the measures that have been put in place to control costs, mean that we believe that the Company is able to continue in operational existence, meet its liabilities as they fall due, operate within its existing facilities, and meet all of its covenant requirements for a period of at least 12 months from the date these financial statements are issued.

 

Based on the above, the consolidated financial statements have been presented on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, we continue to adopt the going concern basis in preparing the consolidated financial statements for the fiscal year ended January 1, 2023.

 

Accumulated Other Comprehensive Income

 

The entire balance of accumulated other comprehensive income is related to the cumulative translation adjustment in each of the periods presented. The changes in the balance of accumulated other comprehensive income are attributable solely to the net change in the cumulative translation adjustment in each of the periods presented, and include the error correction described above during Fiscal 2021.

 

Principles of Consolidation

 

The consolidated financial statements of the Company include the accounts of Membership Collective Group Inc. and its subsidiaries, as well as certain consolidated variable interest entities (“VIEs”) for which the Company is considered the primary beneficiary (see Note 4, Consolidated Variable Interest Entities, for additional information). Other parties’ interests in entities that the Company consolidates are reported as noncontrolling interests within shareholders’ (deficit) equity. Net loss and each component of other comprehensive (loss) are attributed to the owners of the Company and to any noncontrolling interests. All intra-company assets and liabilities, equity, income, expenses and cash flows are eliminated in full on consolidation.

 

Equity Method Investments

 

The Company’s equity method investments consist of investments in which the Company does not control the investee but can exert significant influence over the financial and operating policies, as well as joint ventures where there is joint control (and in both cases if the investee is a VIE, where the Company is not the primary beneficiary of the VIE). The ability to exert significant influence is generally considered to exist when the Company owns between 20% and 50% of voting equity securities of the investee, in the case of corporate entities.

 

When the Company sells an interest in a subsidiary which then becomes an equity method investment, the retained interest is remeasured at fair value.

 

Investments are initially recognized at cost when purchased for cash, or at the fair value of shares received when acquired. The investments are subsequently carried at cost adjusted for the Company’s share of net income or loss and other changes in comprehensive income (loss) of the joint venture, less any dividends or distributions received by the Company. The investments are presented as equity method investments in the consolidated balance sheets. Income or loss from these investments is recorded as a separate line item in the consolidated statements of operations. Intercompany profits or losses associated with the Company’s equity method investments are eliminated until realized by the investee in transactions with third parties. Where distributions from equity-method investees and the Company’s share of investee losses are in excess of the carrying amount of the investment (including, where applicable, advances made by the Company to the investee), after the Company’s equity-method investment balance is reduced to zero, additional losses are recognized to the extent that the Company has guaranteed the investee’s obligations or has otherwise incurred legal or constructive obligations or has made payments on behalf of the investee.

 

The Company considers whether its equity method investments are impaired when events or circumstances suggest that the carrying amount may not be recoverable. An impairment charge is recognized in the consolidated statements of operations for a decline in

value that is determined to be other-than-temporary. Once a determination is made that an other-than-temporary impairment exists, the investment is written down to its fair value. There were no other-than-temporary impairments recorded during the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021.

 

Variable Interest Entities

 

The Company analyzes its variable interests, including loans, guarantees, and equity investments, to determine if the entity in which the Company has a variable interest is a VIE. For those entities determined to be VIEs a quantitative and qualitative analysis is performed to determine if the Company will be deemed the primary beneficiary. The primary beneficiary of a VIE is defined as the variable interest holder that has a controlling financial interest in the VIE. A controlling financial interest is defined as one that has i) the power to direct the activities of the VIE that most significantly impact its economic performance and ii) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE.

 

In evaluating whether the Company has the power to direct the activities of a VIE that most significantly impact its economic performance, the Company bases its qualitative analysis on its review of the design of the entity, its organizational structure including decision-making ability and the relevant development, ownership interest, operating, management and financial agreements. This evaluation requires consideration of all facts and circumstances relevant to decision-making that affect the entity’s future performance and the exercise of professional judgment in deciding which decision-making rights are most important.

 

The Company consolidates those entities in which it is determined to be the primary beneficiary. If the Company is not determined to be the primary beneficiary but can exercise significant influence over these entities, these investments are accounted for under the equity method of accounting.

 

Concentration of Credit Risk

 

Credit risk is the risk of loss from amounts owed by customers and financial counterparties. Credit risk can occur at multiple levels; as a result of broad economic conditions, challenges within specific sectors of the economy, or from issues affecting individual companies. Financial instruments that potentially subject the Company to credit risk consist of cash, cash equivalents, restricted cash, accounts receivable, and other receivables.

 

The Company maintains cash, cash equivalents, and restricted cash with major financial institutions. The Company’s cash, cash equivalents, and restricted cash consist of bank deposits held with banks that, at times, exceed federally insured limits. The Company limits its credit risk by dealing with counterparties that are considered to be of high credit quality.

 

Cash and Cash Equivalents

 

Cash and cash equivalents include cash on hand, demand deposits, and all highly liquid investments with original maturities, when purchased, of three months or less.

 

Restricted Cash

 

Restricted cash represents cash that is not available to the Company due to restrictions related to its use. As of January 1, 2023 and January 2, 2022, restricted cash related primarily to balances with the Company’s payments service provider, financing arrangements for the Soho Beach House in Miami, and security deposits.

 

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown on the consolidated statements of cash flows.

 

 

 

As of

 

(in thousands)

January 1, 2023

 

 

January 2, 2022

 

 

January 3, 2021

 

Cash and cash equivalents

$

 

182,115

 

 

$

 

212,833

 

 

$

 

52,887

 

Restricted cash

 

 

7,928

 

 

 

 

7,829

 

 

 

 

7,083

 

Total cash, cash equivalents, and restricted cash shown on the consolidated statement of cash flows

$

 

190,043

 

 

$

 

220,662

 

 

$

 

59,970

 

 

Accounts Receivable and Allowance for Doubtful Accounts

 

Accounts receivable include amounts due from customers in connection with the Company’s in-house building service whereby the Company extends credit, generally without requiring collateral, based on its evaluation of the customer’s financial condition. Accounts receivable also include amounts due from customers, guests and members relating to services rendered. Any allowance for doubtful accounts includes management’s estimate of the amounts expected to be uncollectible on specific accounts receivable, taking into account the creditworthiness of the counterparty, the aging of the outstanding balance, and historical recoverability patterns. Allowance for doubtful accounts was $4 million as of January 1, 2023 and $3 million as of January 2, 2022.

 

While the Company has a concentration of credit risk in relation to certain customers, this risk is mitigated by payments on account and credit checks on customers. Typically, accounts receivable have terms ranging from 0-60 days and do not bear interest. As of January 1, 2023, there were no customers which individually accounted for more than 10% of trade receivables; there were no customers which individually accounted for more than 10% of revenue during the fiscal year then ended. As of January 2, 2022, there were two customers which individually accounted for more than 10% of trade receivables (16% and 10%); there were no customers which individually accounted for more than 10% of revenue during the fiscal year then ended.

 

Inventories

 

Inventories are valued at the lower of cost or net realizable value and cost is determined using a weighted-average cost method. Inventories consist of raw materials, service stock and supplies (primarily food and beverage), and finished goods which are externally sourced. Raw materials and service stock and supplies totaled $19 million and $8 million as of January 1, 2023 and January 2, 2022, respectively. Finished goods totaled $39 million and $22 million as of January 1, 2023 and January 2, 2022, respectively. The Company records a reserve for obsolete or unusable inventory, where applicable. The reserve was less than $1 million and zero as of January 1, 2023 and January 2, 2022, respectively.

 

Property and Equipment

 

Property and equipment relate to buildings for owned Houses, leasehold improvements for leased Houses, fixtures and fittings and other office equipment. Property and equipment are recorded at cost, or if acquired in a business combination, at fair value as of the acquisition date, less accumulated depreciation. Costs of improvements that extend the economic life or improve service potential are capitalized. Capitalized costs are depreciated over the assets’ estimated useful lives. Costs for normal repairs and maintenance are expensed as incurred. The carrying amounts of assets sold or retired and the related accumulated depreciation are eliminated in the year of disposal, with resulting gains or losses included in gain (loss) on sale of property and other, net in the consolidated statements of operations.

 

Depreciation is recorded using the straight-line method over the assets’ estimated useful lives, which are generally as follows:

 

Buildings

50-100 years

Leasehold improvements

Lesser of useful life or remaining lease term

Fixtures and fittings

2-5 years

Office equipment and other

2-4 years

Finance lease property

Reasonably assured lease term

 

Depreciation expense is included in depreciation and amortization in the accompanying consolidated statements of operations.

 

Assets under construction relate mainly to the build out of future Houses, are stated at cost and depreciation begins when the asset is placed in service. For property under construction, the Company capitalizes all specifically identifiable costs related to development activities, as well as interest costs incurred while activities necessary to get the property ready for its intended use are in progress. During the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021, there was no capitalized interest.

 

Impairment of Property and Equipment

 

The Company reviews its property and equipment for impairment indicators at each reporting date. Impairment losses are required to be recorded for long-lived assets to be held and used by the Company when indicators of impairment are present and the carrying value of the assets exceeds the future undiscounted cash flows estimated to be generated by those assets. When an asset group to be held and used by the Company is determined to be impaired, the related carrying amount of the asset is adjusted to its estimated fair value. Recoverability of long-lived assets is measured by comparison of (i) the carrying amount of assets to (ii) the future

undiscounted cash flows that the assets are expected to generate over their remaining lives. If the carrying amount of the assets is not recoverable, the amount of impairment, if any, is measured as the difference between the carrying value and the fair value of the impaired assets. If the Company determines that the remaining useful life is shorter than originally estimated, it amortizes the remaining carrying value over the new shorter useful life. No impairment losses were recorded during the fiscal year ended January 1, 2023 and January 2, 2022. Impairment losses were less than $1 million during the fiscal year ended January 3, 2021.

 

Business Combinations

 

The Company accounts for its business combinations using the acquisition method of accounting. The consideration transferred in a business combination is measured as the aggregate of the acquisition date fair values of the assets transferred by the Company to the sellers and equity instruments issued. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable tangible and intangible assets acquired and liabilities assumed are measured separately at their fair values as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total consideration transferred, fair value of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree is recorded as goodwill. If the consideration transferred is less than the fair value of the net assets of the acquiree, the difference is recognized directly in the consolidated statements of operations as a gain. During the measurement period, which can be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed. See Note 3, Acquisitions, for additional information.

 

Transactions between entities under common control are excluded from the scope of the business combinations guidance. The Company accounts for transfers of assets, net assets or equity interests between entities under common control prospectively at the parent's carrying values.

 

Intangible Assets with Finite Useful Lives

 

The Company has certain finite lived intangible assets that were initially recorded at their fair values. These intangible assets consist primarily of brand names, membership lists, hotel management agreements, internally developed software and trademarks. Intangible assets with finite useful lives, which have a weighted-average life of 17 years, are amortized using the straight-line method over their estimated useful lives.

 

All finite lived intangible assets are reviewed for impairment when circumstances indicate that their carrying amounts may not be recoverable; for example, when there are material adverse changes in projected revenues or expenses, significant underperformance relative to historical or projected operating results, or significant negative industry or economic trends. The Company evaluates recoverability of a finite lived intangible asset by comparing its carrying value to its estimated fair value, which is determined through the income approach, the market approach or another appropriate method based on the circumstances. If a finite lived intangible asset’s estimated current fair value is less than its respective carrying value, the excess of the carrying value over the estimated fair value is recognized as an impairment loss in the consolidated statements of operations.

 

During Fiscal 2020, House closures and uncertainties surrounding re-opening procedures associated with the COVID-19 pandemic constituted a triggering event for testing whether intangible assets were impaired. The Company performed a quantitative assessment as of the first quarter of Fiscal 2020 and concluded there was no impairment. No impairment losses were recorded during the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021.

 

Costs incurred during the application development stage for internal-use software are capitalized. Capitalized website development costs and internal-use software costs are amortized using the straight-line amortization method over the estimated useful life of the applicable software.

 

Goodwill

 

In January 2012, affiliates of the Yucaipa Companies, LLC acquired 58.9% of the outstanding equity interests of the entity which subsequently became Soho House Holdings Limited through a series of transactions. The Acquisition was accounted for using the acquisition method of accounting, which resulted in a new basis for the assets acquired and liabilities assumed and the recognition of goodwill. In addition, the Company recognized goodwill as a result of the acquisition of a business in Mykonos, Greece during the fiscal year ended December 29, 2019, as well as the acquisition of a controlling interest in Soho House—Cipura (Miami), LLC ("Cipura") and the companies that together operate existing and future "The LINE" and "Saguaro" hotels in the United States during the fiscal year ended January 2, 2022. See Note 3, Acquisitions, for additional information.

 

Goodwill is not amortized, but instead is tested for impairment annually. The Company assesses goodwill for potential impairment on the first day of the fourth fiscal quarter, or during the year if an event or other circumstances indicate that the Company may not be able to recover the carrying amount of the net assets of the reporting unit. A reporting unit is an operating segment or one level below the operating segment level, which is referred to as a component. The Company identifies its reporting units by assessing whether components (i) have discrete financial information available; (ii) engage in business activities; and (iii) have a segment manager who regularly reviews the component’s operating results. Net assets and goodwill of acquired businesses are allocated to the reporting unit(s) associated with the acquired business based on the anticipated organizational structure of the combined entities. If two or more components are deemed economically similar, those components are aggregated into one reporting unit when performing the annual goodwill impairment review. As of January 1, 2023 and January 2, 2022, the Company had seven reporting units with a goodwill balance.

 

In evaluating goodwill for impairment, the Company may first assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50%) that the fair value of a reporting unit is less than its carrying amount. Qualitative factors that the Company considers include, for example, macroeconomic and industry conditions, overall financial performance, and other relevant entity-specific events. If the Company bypasses the qualitative assessment or concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then a quantitative goodwill impairment test is performed to identify potential goodwill impairment and measure the amount of goodwill impairment that will be recognized, if any.

 

When performing the quantitative goodwill impairment test, the Company compares the estimated fair value of each of its reporting units with their respective carrying values. If the estimated fair value of a reporting unit exceeds its carrying amount, goodwill is not considered impaired. If, however, the estimated fair value of a reporting unit is less than its carrying amount, the excess of the carrying value of the reporting unit over its fair value is recognized as a goodwill impairment. When performing a quantitative goodwill impairment assessment, the estimated fair value of a reporting unit is calculated using the income approach and the market approach. For the income approach, the Company uses internally developed discounted cash flow models that include the following assumptions, among others: projections of revenues, expenses, and related cash flows based on assumed long-term growth rates and demand trends; expected net working capital and capital expenditure requirements; and estimated discount rates. For the market approach, the Company relies upon valuation multiples derived from stock prices and enterprise values of publicly-traded companies that are comparable to the reporting units being evaluated.

 

While the Company tests its goodwill for impairment at least annually, it will test its goodwill for impairment if an event occurs or circumstances change which are considered to be a triggering event that would more likely than not reduce a reporting unit’s fair value below its carrying amount. In Fiscal 2021, the Company performed a quantitative impairment assessment for two reporting units and a qualitative assessment for the remaining five reporting units; based on these assessments, the Company determined that no goodwill impairment existed. In Fiscal 2022, the Company performed a quantitative impairment assessment for seven reporting units; based on these assessments, the Company determined that no goodwill impairment existed.

 

 

Leases

 

The Company has entered into lease agreements for its Houses, hotels, restaurants, spas and other properties. The Company accounts for its leases under ASU 2016-02, Leases (Topic 842).

 

The Company determines the initial classification and measurement of its right-of-use assets and lease liabilities at the lease commencement date and thereafter, if the leases are modified. The lease term includes any renewal options and termination options that the Company is reasonably assured to exercise. The present value of lease payments is determined by using the interest rate implicit in the lease, if that rate is readily determinable; otherwise, the Company uses its incremental borrowing rate. The incremental borrowing rate is determined by using a portfolio approach based on the rate of interest that the Company would pay to borrow on a collateralized basis an amount equal to the lease payments for a similar term and in a similar economic environment.

 

Rent expense for operating leases is recognized on a straight-line basis over the reasonably assured lease term based on the total lease payments and is included in other in-house operating expenses and other operating expenses in the consolidated statements of operations.

 

The Company recognizes the amortization of the right-of-use asset for its finance leases on a straight-line basis over the reasonably assured lease term in depreciation and amortization in the consolidated statements of operations. The interest expense related to finance leases is recognized using the effective interest method and is included within interest expense, net.

 

For all leases, rent payments that are based on a fixed index or rate at the lease commencement date are included in the measurement of right-of-use assets and lease liabilities at the lease commencement date. Rent payments that vary based on the outcome of future indices, rates, or the Company’s revenues are expensed in the period incurred.

 

The Company has previously elected the practical expedient to not separate lease and non-lease components. The Company’s non-lease components are primarily related to property maintenance, which varies based on future outcomes, and thus is recognized in rent expense when incurred. In addition, the Company elected to exclude short-term leases, or leases with a term of 12 months or less that do not contain a purchase option that the Company is reasonably certain to exercise, from the right-of-use asset and lease liability balances.

 

As part of our overall plan to improve liquidity during the COVID-19 pandemic, the Company negotiated with certain lessors to defer or waive certain rent payments on leased buildings. Cash payment deferrals and waivers have been separately recorded in the period arrangements occurred, and therefore, there have been no remeasurements to the lease liabilities and right-of-use assets associated with the sites that received concessions. The Company accounted for the deferrals of lease payments as if there are no changes in the lease contract. Deferred amounts have been recognized in accounts payable and subsequent reversals will occur once the payments are made. As of January 1, 2023 and January 2, 2022, less than $1 million and $12 million, respectively, is recorded in accounts payable in the consolidated balance sheets related to deferred lease payments.

 

Sale Leaseback Transactions

 

The Company accounts for a transaction as a sale of an asset and a leaseback of that asset only if the buyer-lessor obtains control of the asset in accordance with the provisions of ASC 606, Revenue from Contracts with Customers (Topic 606). In these circumstances, the Company (as the seller-lessee) derecognizes the carrying amount of the asset, recognizes the transaction price for the sale, and accounts for the lease in accordance with Topic 842. When a sale and leaseback transaction does not qualify for sale accounting, the Company does not derecognize the underlying asset and accounts for the transaction as a financing obligation.

 

Debt Issuance Costs

 

Debt issuance costs relate to the Company’s debt instruments. These costs are reflected as a deduction from the carrying amount of the related debt instrument, with the exception of the Company’s revolving credit facility, for which debt issuance costs are reflected as a current asset following repayment in full of the amount drawn under the facility during the fiscal year ended January 2, 2022. Debt issuance costs are deferred and amortized over the term of the related debt instrument using the effective interest method. As of January 1, 2023 and January 2, 2022, these costs totaled $10 million (including $1 million presented within prepaid expenses and other current assets) and $13 million (including $1 million presented within prepaid expenses and other current assets), respectively. Amortization expense associated with debt issuance costs (excluding write-offs recognized upon extinguishment of debt), which is

included within interest expense, net, totaled $4 million, $5 million, and $6 million for the fiscal years ended January 1, 2023, January 2, 2022 and January 3, 2021, respectively.

 

Fair Value Measurements

 

The Company has various financial instruments measured at fair value on a periodic basis for disclosure purposes. See Note 13, Fair Value Measurements, for further information. The Company also applies the fair value measurement framework to various nonrecurring measurements for its financial and nonfinancial assets and liabilities.

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date (an exit price). The Company uses the three-level valuation hierarchy for classification of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability and may be considered observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized below.

Level 1 Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 Valuation is based upon quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument.

Level 3 Valuation is based upon other unobservable inputs that are significant to the fair value measurement.

 

The classification of assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement in its entirety. Proper classification of fair value measurements within the valuation hierarchy is considered each reporting period. The use of different market assumptions or estimation methods may have a material effect on the estimated fair value amounts.

 

Revenue Recognition

 

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account for purposes of recognizing revenue. The majority of the Company’s contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct. There is no variable consideration or obligations for returns or refunds, and no other related obligations in the Company’s contracts.

 

Payment terms and conditions vary by contract type and may include a requirement of payment up to 60 days (as described further below). In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined its contracts do not include a significant financing component.

 

The Company’s revenues are primarily derived from the following sources and are recognized when or as the Company satisfies a performance obligation by transferring a good or service to a customer.

 

Membership Revenues

 

Membership revenues are comprised of annual membership fees and one-time initial registration fees.

 

Memberships are offered on an annual basis for access to Houses. Annual membership fees are paid annually, quarterly or monthly and are deferred and recognized over the term to which the payment relates. Revenue is measured based on the amount invoiced for the member’s annual membership fee. The current portion of deferred revenue relates primarily to annual membership fees. There is no non-current deferred revenue relating to annual membership fees.

 

One-time registration fees are non-refundable and are invoiced to the member on their acceptance of membership. Such registration fees are recognized as non-current deferred revenue upon payment, and are recognized as revenue over the estimated average membership life of 20 years. Registration fees of $2 million, $2 million, and $1 million were recognized as revenue in the fiscal years

ended January 1, 2023, January 2, 2022, and January 3, 2021 respectively. As of January 1, 2023 and January 2, 2022, current deferred revenue related to one-time registration fees totaled $2 million and $2 million, respectively, and non-current deferred revenue related to such fees totaled $27 million and $28 million, respectively.

 

House Introduction Credits

 

New members admitted on or after April 4, 2022 are required to purchase House Introduction Credits ("House Introduction Credits") as part of their membership, per the House rules. House Introduction Credits are credits of an equivalent value to cash within Houses and are redeemable against purchases of food and beverage items and bedroom stays at the Houses. House Introduction Credits expire after three months from the date of issuance, where legally permitted in the regions we operate, if not utilized or if the Company terminates a member's House membership. House Introduction Credits are recognized upon issuance as deferred revenue on our consolidated balance sheets. Revenue from House Introduction Credits are recognized as In-House revenues when redeemed by members, and as breakage revenue within Membership revenues upon expiration or in the period when we are able to reliably estimate expected breakage to the extent that they are unredeemed and further redemption is deemed remote.

 

In-House Revenues

 

In-House revenues represent all revenues generated within our Houses and primarily include revenues from food and beverage, accommodation, and spa products and treatments.

 

Revenue from food and beverage sales in the Company’s Houses is measured based on the amount invoiced for food and beverage purchased by the customer. Revenues are recognized when the goods are consumed. Payment is collected from the customer at the same time as the performance obligation is satisfied and, therefore, there are no material receivables, contract assets or contract liabilities related to food and beverage sales.

 

Hotel accommodation revenue is recognized when the rooms are occupied. Revenue is measured based on the amount invoiced for the room as specified in the contract when the room booking is made. Deposits received in advance of the hotel accommodation are deferred as contract liabilities and recognized as revenue when the customer occupies the room. As of January 1, 2023 and January 2, 2022, advance deposits of $12 million and $9 million, respectively, were recorded as accrued liabilities on the consolidated balance sheets.

 

Retail sales represent sales of goods and services, including from spas and cinema properties. Revenue from these transactions is recognized at the point in time when the goods and services have been delivered or rendered. Sales made online include shipping revenue and are recognized on dispatch to the customer. Payment terms with respect to retail sales and wholesale sales range from immediate payment at point of sale up to approximately 60 days. Amounts invoiced to customers for completed sales are recorded within accounts receivable on the consolidated balance sheets.

 

Other Revenues

 

Other revenues include all revenues that are not generated within our Houses. This includes revenues from Scorpios, Soho Works and our stand-alone restaurants, procurement fees from Soho House Design ("SHD"), Soho Home and Cowshed retail products and other revenues from products and services that we provide outside of our Houses, as well as management fees from the Ned and LINE and Saguaro hotels. For further information regarding the Company’s management agreement with The Ned, refer to Note 4, Consolidated Variable Interest Entities.

 

Revenue recognized from Soho House Design totaled $22 million, $13 million, and $14 million for the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021, respectively. During the fiscal year ended December 29, 2019, Soho House Design ceased providing build-out services as a result of the Company’s decision to shift strategic focus to the higher-margin design services. Some of SHD’s build-out and design services are provided as part of the Company’s in-house development activities (including to certain related parties as described in Note 22, Related Parties), which do not generate revenues from third parties. The percentage of Soho House Design revenues relating to build-out and design contracts from unaffiliated third parties was 43% and 7% during the fiscal years ended January 1, 2023 and January 2, 2022, respectively. Soho House Design’s revenues relating to build-out and design contracts from unaffiliated third parties were immaterial during the fiscal year ended January 3, 2021.

 

Build-out and design contracts consist of a single performance obligation which is satisfied over time as the design and build work is completed and verified by third party contractors against specified contract milestones (output method of progress). The Company invoices for the work completed in accordance with the payment terms of the customer’s contract.

 

Sponsorship income is recognized upon the successful completion of the related event. Food and beverage sales from restaurants not located in one of the Company’s Houses or hotels are recognized in a manner similar to In-House food and beverage sales, as previously described.

 

Practical Expedients

 

The Company applies the practical expedient not to disclose the amount of the transaction price allocated to the remaining performance obligations and an explanation of when the Company expects to recognize that amount as revenue. In addition, the Company applies the practical expedient and does not disclose information about remaining performance obligations for contracts that have original expected durations of one year or less.

 

In-House Operating Expenses and Other Operating Expenses

 

In-House operating expenses represent the cost of sales of our In-House revenues and consist primarily of the cost of food and beverage products, employee-related costs for In-House staff members, rent expense, and utility costs. Other operating expenses represent the cost of sales of our Other revenues and consist primarily of the cost of retail products, food and beverage product costs associated with non-House restaurant operations, and employee-related costs for non-House staff members.

 

Government Grants

 

Throughout Fiscal 2020, as a result of impacts from the COVID-19 pandemic, governmental agencies in the United Kingdom and other European countries provided the Company grants primarily to support payroll needs. These government grants are exclusive of funds received (and eventually paid off) under the Paycheck Protection Program enacted by the U.S. Coronavirus Aid, Relief, and Economic Security Act, which were accounted for as a borrowing (refer to Note 12, Debt, for more information). Government grants are recognized when there is reasonable assurance that cash will be received and that conditions attached to the grant have been met. Such government grants totaled $5 million during the fiscal year ended January 1, 2023 and are presented as a reduction of payroll expenses within In-House operating expenses ($5 million) and other operating expenses (less than $1 million) on the consolidated statements of operations. During the fiscal year ended January 2, 2022, government grants totaled $21 million and were presented as a reduction of payroll expenses within In-House operating expenses ($17 million), other operating expenses ($3 million) and general and administrative expense ($1 million) on the consolidated statements of operations.

 

Interest Expense

 

Interest expense is charged to the consolidated statements of operations over the term of the debt such that the amount charged is at a constant rate on the carrying amount (i.e. using the effective interest method). Interest expense includes the amortization of debt issuance costs, which are initially recognized as a reduction in the proceeds of the associated debt instrument, and interest expense on finance leases.

 

Business Interruption and Other Insurance Claims

 

The Company maintains insurance policies to cover business interruption and property damage with terms that it believes to be adequate and appropriate. When the Company receives proceeds from the insurance claim in connection with property damage, which reimburses the replacement cost for repair or replacement of damaged assets, the proceeds are recognized as a reduction against the value of the assets written off. Business interruption proceeds which reimburse the time-element of actual costs and lost profits following damage to property are recognized as non-operating income. Business interruption proceeds related to the cost to expedite repairs, retention pay to workers temporarily displaced, and additional expenses to stay in business following damage to property are recognized as a reduction of the related expense line item. If there are any outstanding receivables in respect of insurance recoveries, they are recognized only when the Company deems collection to be virtually certain.

 

Income Taxes

 

Significant judgment is involved in determining the provision for income taxes. There are certain transactions for which the ultimate tax determination is unclear due to uncertainty in the ordinary course of business. The Company recognizes tax liabilities based on its assessment of whether its tax return positions are supportable, and more likely than not to be sustained, based on the technical merits and assuming the position will be examined by the relevant taxing authority that has full knowledge of all relevant information. Where the Company has determined that its tax return filing position does not satisfy the more likely than not recognition threshold, the Company will record an uncertain tax position. Each period the Company assesses uncertain tax positions for recognition, measurement and effective settlement. The Company recognizes accrued interest and penalties for any unrecognized tax benefits as a component of income tax (benefit) expense.

 

Income tax (benefit) expense consists of taxes currently payable and changes in deferred tax assets and liabilities calculated according to local tax rules. Deferred tax assets and liabilities are based on temporary differences that arise between carrying values of assets and liabilities used for financial reporting purposes and amounts used for taxation purposes and the future tax benefits of tax loss carry forwards. A deferred tax asset is recognized only to the extent that it is more likely than not that future taxable profits will be available against which the asset can be utilized.

 

Significant judgment is required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for a valuation allowance, management considers all available evidence for each jurisdiction, including past operating results, estimates of future taxable income and the feasibility of ongoing tax planning strategies. In the event that the Company changes its determination as to the amount of deferred tax assets that can be realized, the Company will adjust its valuation allowance with a corresponding impact to income tax (benefit) expense in the period in which such determination is made.

 

The amount of deferred tax recognized in any period is based on tax rates enacted as of the balance sheet date. The impact of tax law changes is recognized in periods when the change is enacted. The Company classifies all deferred tax assets and liabilities, including any related valuation allowance, as non-current on the consolidated balance sheets.

 

Indirect Taxes

 

The Company remits sales, value added and other indirect taxes to various taxing jurisdictions as a result of revenue earned from the sale of products and services to customers. Specific sales tax rates applicable to the Company’s products and services vary by taxing jurisdiction. The Company records sales, value added and other indirect taxes as liabilities when incurred. Revenue is recognized net of sales, value added and other indirect taxes.

 

Foreign Currency and Operations

 

During periods preceding the IPO that are presented in these consolidated financial statements, our business was conducted through SHHL. The functional currency of SHHL is the British pound sterling ("GBP"). As a result of the Reorganization Transactions in connection with the IPO, SHHL became a wholly-owned subsidiary of MCG. The functional currency of MCG is the United States dollar ("USD"). Our reporting currency for the consolidated financial statements is the USD for all periods presented.

 

The functional currency is the currency of the primary economic environment in which an entity’s operations are conducted. The functional currency of the Company’s subsidiaries is generally the same as their local currency. The Company translates the financial statements of its subsidiaries into the presentation currency using exchange rates in effect on the balance sheet date for assets and liabilities and average exchange rates for the period for statement of operations accounts, with the difference recognized in accumulated other comprehensive (loss) income. The following exchange rates were used to translate the financial statements of the Company and its foreign subsidiaries into USD:

 

 

As of

 

January 1, 2023

 

January 2, 2022

Great Britain pound sterling

$

1.21

 

$

1.35

Canadian dollar

 

0.74

 

 

0.79

Euro

 

1.07

 

 

1.14

Hong Kong dollar

 

0.13

 

 

0.13

Israeli new shekel

 

0.28

 

 

0.32

Danish krone

 

0.14

 

 

N/A

Swedish krona

 

0.10

 

 

N/A

Mexican peso

 

0.05

 

 

N/A

Qatari riyal

 

0.27

 

 

N/A

 

 

For the Fiscal Year Ended

 

January 1, 2023

 

January 2, 2022

 

January 3, 2021

Great Britain pound sterling

$

1.23

 

$

1.38

 

$

1.28

Canadian dollar

 

0.77

 

 

0.80

 

 

0.74

Euro

 

1.05

 

 

1.18

 

 

1.14

Hong Kong dollar

 

0.13

 

 

0.13

 

 

0.13

Israeli new shekel

 

0.30

 

 

0.31

 

 

0.29

Danish krone

 

0.14

 

 

N/A

 

 

N/A

Swedish krona

 

0.10

 

 

N/A

 

 

N/A

Mexican peso

 

0.05

 

 

N/A

 

 

N/A

Qatari riyal

 

0.28

 

 

N/A

 

 

N/A

 

Foreign currency transaction gains and losses are included in other in the consolidated statements of operations. The Company recorded foreign currency transaction net losses of $70 million, net losses of $26 million, and net gains of $3 million during the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021, respectively.

 

Pre-Opening Expenses

 

Pre-opening expenses include costs associated with the acquisition, opening, conversion and initial setup of new and converted sites, including rent, overhead expenses, pre-opening marketing and incremental wages to support the “ramp up” period of time to support the site in the initial period following opening. These costs are expensed as incurred and are included in pre-opening expenses in the consolidated statements of operations. The entire balance of these costs is related to pre-opening activities for our Houses in each of the periods presented.

 

Advertising Costs

 

The cost of advertising and media is expensed as incurred. For the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021, advertising costs totaled $7 million, $6 million, and $4 million, respectively. Advertising costs are included in general and administrative expense in the consolidated statements of operations.

 

Share-Based Compensation

 

Share-based compensation is measured at the estimated fair value of the award on the grant date and recognized as an expense on a straight-line basis over the vesting period of the award. The Company does not reduce share-based compensation for an estimate of forfeitures and will account for forfeitures when they occur. In order to determine the grant date fair value of awards granted prior to IPO, the Company applied the Black-Scholes option-pricing valuation model. The determination of fair value of these awards is subjective and involves estimates and assumptions including expected term of the awards, volatility of the Company’s shares, expected dividend yield, and the risk-free rate. The Company uses the closing stock price on the date of grant to determine the grant date fair value for restricted stock units ("RSUs").

 

Share-based compensation expense is recorded within general and administrative expense in the consolidated statements of operations. See Note 14, Share-Based Compensation, for additional information.

 

Limited reorganization of support and operations functions



During the fourth quarter of fiscal year ended January 1, 2023, the Company engaged in a limited reorganization of its support and operations functions following a change in the Company’s senior leadership. This resulted in the termination of employees in our support and operations teams. The amount recognized as an expense in fiscal year ended January 1, 2023, in “Other expenses, net”, which is not allocated to our Reported Segments, was $4 million. The majority of this obligation had been settled as of January 1, 2023, with less than $1 million expected to be settled during the first quarter of fiscal year ended December 31, 2023.

 

Offering Costs

 

Direct and incremental legal and accounting costs associated with the Company’s initial public offering totaling less than $1 million and $40 million have been recorded as a reduction of offering proceeds within additional paid-in capital in the consolidated balance sheet as of January 1, 2023 and January 2, 2022, respectively. In addition, the Company incurred $14 million of costs related to the offering which were recognized in other in the consolidated statement of operations for Fiscal 2021.

 

Net Loss per Share

 

The Company computes net loss per share using the two-class method. As the liquidation and dividend rights are identical, the undistributed earnings or losses are allocated on a proportionate basis to each class of common stock, and the resulting basic and diluted loss per share attributable to common stockholders are therefore the same for Class A and B common stock. Basic loss per share is computed by dividing loss available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted loss per share is based on the weighted-average number of common shares outstanding for the period and respective share equivalents outstanding at the end of the period, unless the effect is anti-dilutive. An anti-dilutive impact is a reduction in net loss per share resulting from the conversion, exercise, or contingent issuance of certain securities. Since the Company had net losses for all the periods presented, basic and diluted loss per share are the same, and additional potential common shares have been excluded as their effect would be anti-dilutive.

 

As discussed in Note 1, Nature of the Business, immediately prior to the IPO, the Company completed certain reorganization transactions which resulted in changes to our common stock and issued and outstanding shares but no change in relative shareholder rights, rank, or value before and after the reorganization transaction. As such, the Reorganization Transactions were considered to have an equivalent effect to a stock split and require retrospective treatment for purposes of computing loss per share. All share and per share information has been retroactively adjusted to reflect the impact of the Reorganization Transactions for all periods presented.

 

The issuance of shares in the IPO and the impact of conversion of the senior convertible preference shares into Class A common stock are included in the calculation of loss per share prospectively from the date of issuance or conversion, as the case may be.

 

SHHL Redeemable Preferred Shares and SHHL Redeemable C Ordinary Shares

 

As of January 3, 2021, SHHL had redeemable preferred shares and redeemable C ordinary shares outstanding, which are collectively referred to as "redeemable shares." In addition, in March 2021, the Company issued senior convertible preference shares, which were subsequently converted into Class A common stock immediately after the IPO. See Note 15, SHHL Redeemable Preferred Shares and Note 16, SHHL C Ordinary Shares, for additional information.

 

Preferred shares subject to mandatory redemption as of a specified date are classified as debt and are initially measured at fair value. Contingently redeemable shares (including shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company's control) are classified as temporary equity and initially measured at fair value.

 

When redemption is deemed to be probable, if the carrying amount of the redeemable shares is less than the redemption value, the carrying value of the shares is increased by periodic accretions so that the carrying value is equal to the redemption amount at the

earliest redemption date. Such accretion is recorded as a dividend in the consolidated statements of changes in shareholders' equity (deficit).

 

Prior to February 2019, SHHL had certain preferred shares that were redeemable after five years and were considered probable of becoming redeemable in the future. For those shares, the redemption price was fixed, such that no adjustment or accretion was required to the carrying value. Certain other redeemable shares which are neither initially redeemable nor considered to be probable to be redeemable are recorded at their initial carrying value, and an adjustment of the initial carrying amount is not made until it is probable that the shares will become redeemable. During the second fiscal quarter of 2021, the Company concluded that certain SHHL redeemable preferred shares were probable of becoming redeemable and, therefore, the shares were accreted to their redemption value; see Note 15, SHHL Redeemable Preferred Shares, for additional information.

 

Commitments and Contingencies

 

The Company is subject to loss contingencies that arise out of operations in the normal course of business. Periodically, the Company reviews the status of each significant matter and assesses the potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable, and the amount can be reliably estimated, such amount is recognized in other liabilities on the consolidated balance sheets.

 

Contingent liabilities are measured at the Company’s best estimate of the expenditure required to settle the obligation as of the end of the reporting period. If there is no best estimate, an amount is recorded for the lowest amount of the range of potential outcomes. Refer to Note 18, Commitments and Contingencies, for more information.

 

Future Accounting Standards

 

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). The ASU adds to US GAAP an impairment model (known as the current expected credit loss, or “CECL,” model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which is intended to result in the more timely recognition of losses. Under the CECL model, entities will estimate credit losses over the entire contractual term of the instrument from the date of initial recognition of the financial instrument. The update is effective for the Company for fiscal years beginning after December 15, 2022 or the interim period in which the Company loses emerging growth company status, and should be adopted using a modified retrospective approach, which applies a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective.

 

In November 2018 and April 2019, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses and ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, respectively. These amendments add clarity to certain areas within ASU 2016-13. In May 2019, the FASB issued ASU 2019-05, Financial Instruments - Credit Losses (Topic 326), Target Transition Relief, which provided transition relief for entities adopting ASU 2016-13 by allowing the election of the fair value option on certain financial instruments. The effective date and the transition methodology for the amendments in these updates are the same as in ASU 2016-13.

 

ASU 2016-13 and related updates apply to how the Company evaluates impairments of its trade receivables and notes receivable. The Company does not expect these ASUs to have a material impact on its consolidated financial statements and related disclosures.

 

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The ASU requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers. The update is effective for the Company for fiscal years beginning after December 15, 2023 or the interim period in which the Company loses emerging growth company status, and should be adopted using a prospective approach to business combinations occurring on or after the effective date of the amendments. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.

 

Recently Adopted Accounting Standards

 

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance. The amendments in this update require additional annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. The update is effective for the Company for fiscal years beginning after December 15, 2021, and should be adopted prospectively to all transactions within the scope of the amendments that are reflected in financial statements at the date of initial application and new transactions entered into after the date of initial application, or retrospectively to those transactions. The Company adopted ASU 2021-10 on January 3, 2022 and applied its provisions prospectively. The adoption of ASU 2021-10 did not have a significant effect on the Company’s consolidated financial statements and related disclosures.

 

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in US GAAP. The ASU’s amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company elected to early adopt the ASU on January 4, 2021. The provisions of this ASU have been applied on a modified retrospective basis and did not have a material impact on the Company’s consolidated financial statements and related disclosures.

 

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The purpose of ASU No. 2019-12 is to continue the FASB’s Simplification Initiative to reduce complexity in accounting standards. The amendments in ASU No. 2019-12 simplify the accounting for income taxes by removing certain exceptions related to the incremental approach for intra-period tax allocation, the requirement to recognize or derecognize deferred tax liabilities related to equity method investments that are also foreign subsidiaries, and the methodology for calculating income taxes in an interim period. The Company adopted the ASU on January 3, 2022 for Fiscal 2022. The adoption of ASU 2019-12 did not materially affect the Company's consolidated financial statements and related disclosures.
v3.22.4
Acquisitions
 12 Months Ended
Jan. 01, 2023
Business Combinations [Abstract]  
Acquisitions
3.
Acquisitions

 

Scorpios Acquisition

 

In April 2019, the Company acquired a controlling interest in certain businesses in Greece (“Scorpios Acquisition”) for total consideration of approximately $52 million, including cash consideration of $51 million and contingent consideration of $1 million. The acquired businesses (collectively referred to as the “Scorpios businesses”) comprise a beach club (in which the Company acquired a 67% ownership interest), a hotel (in which the Company acquired a 75% ownership interest), and a restaurant that was under construction as of the acquisition date (in which the Company acquired a 71% ownership interest that was subsequently sold). The Scorpios Acquisition was accounted for as a business combination.

 

On April 30, 2021, the Company acquired an additional 12% equity interest from various noncontrolling interest holders of Paraga Beach S.A., the entity which owns and operates Scorpios Beach Club, for cash consideration of $9 million. On May 12, 2021, the Company issued 572,410 C2 ordinary shares of SHHL with an aggregate fair value of $8 million to Seligny Holdings Limited and Jaquelle Limited in order to acquire an additional 11% equity interest in Paraga Beach S.A (collectively, the “Scorpios Noncontrolling Interests Acquisitions”). The fair value of the SHHL C2 ordinary shares was derived by using an implied valuation of $13.49 per share which was supported by recent third-party capital raising transactions that occurred during Fiscal 2021. The Scorpios Noncontrolling Interests Acquisitions were accounted for as transactions with noncontrolling interest holders that did not result in a loss of control. In total, the Company derecognized noncontrolling interest of $16 million and recorded the difference between the fair value of consideration transferred to the noncontrolling interest holders and the carrying value of the noncontrolling interest as a reduction in additional paid-in capital. Following the Scorpios Noncontrolling Interests Acquisitions, Seligny Holdings Limited and Jaquelle Limited continue to hold a 10% ownership interest in Paraga Beach S.A.

 

Soho Restaurants Limited (previously known as Quentin Limited) Reorganization and Acquisition

 

In August 2020, the Company became the primary beneficiary of Quentin Limited (now known as Soho Restaurants Limited, "Soho Restaurants") after a related party became the sole equity owner of Soho Restaurants following a reorganization of the entity. As a result, the Company began consolidating Soho Restaurants and applied the acquisition method of accounting at the date that it became

the primary beneficiary as a result of this transaction. No consideration was paid by the Company in this transaction. Upon initial consolidation, the Company recognized $1 million of cash and cash equivalents, $5 million of net working capital liabilities, and $11 million of right-of-use assets and related lease liabilities. In addition, the Company recognized noncontrolling interest of $2 million. There were no material property, plant and equipment and no intangible assets recognized by the Company as a result of consolidating Soho Restaurants.

 

Prior to the reorganization, the Company guaranteed the obligations of Soho Restaurants under certain property leases with respect to any required rental and other payments. Prior to Fiscal 2020, the Company did not have to make any payments under these rental guarantees and determined that the likelihood of the Company having to perform under the guarantees was remote. As a result of the impact of the COVID-19 pandemic on Soho Restaurants’ operations, the Company reassessed the likelihood of performance under the guarantees and recognized a charge of $5 million prior to the Soho Restaurants reorganization; this guarantee provision is included in general and administrative expense in the consolidated statement of operations for the fiscal year ended January 3, 2021. Upon consolidating Soho Restaurants in August 2020, the Company’s guarantee obligation pertaining to leases retained by Soho Restaurants after the reorganization was effectively settled as a pre-existing relationship.

 

On March 29, 2022, the Company acquired all of the outstanding equity interests of Soho Restaurants for nominal consideration (the “Soho Restaurants Acquisition”) from Quentin Partners. Because the Company consolidated Soho Restaurants prior to the Soho Restaurants Acquisition, the Company accounted for the Soho Restaurants Acquisition as a transaction with a noncontrolling interest holder that did not result in a change of control. The Company derecognized a noncontrolling deficit of $2 million and recorded the difference between the fair value of consideration transferred to Quentin Partners and the carrying value of the noncontrolling interest as a reduction in additional paid-in capital (i.e. a deemed distribution in the absence of retained earnings). Following the Soho Restaurants Acquisition, the Company became the sole equity owner of Soho Restaurants.

 

Also, on March 29, 2022, Soho Restaurants entered into a Trademark Assignment with Chick’n Limited, pursuant to which Soho Restaurants has agreed to transfer the rights to certain intangible assets to Chick’n Limited in exchange for three separate cash payments over a one-year period, commencing on March 29, 2022, totaling £1 million ($2 million), all of which was recognized in gain on sale of property and other, net in the consolidated statements of operations for the fiscal year ended January 1, 2023.

 

Concurrently, on March 29, 2022, Soho Restaurants entered into a royalty-free Product License Agreement with Chick’n Limited, pursuant to which Chick’n Limited has agreed to grant the Company a non-exclusive, royalty-free license to produce and sell certain burgers at certain Soho Restaurant properties for a term of two years. Other than with respect to this limited license, Soho Restaurants has no legal right to the product.

 

Cipura Acquisition

 

Prior to May 2021, the Company held a 50% interest in Cipura, which owns and operates the Mandolin Aegean Bistro, located in Miami, Florida. Historically, the Company accounted for its investment in Cipura using the equity method of accounting. On May 10, 2021, the Company acquired the remaining 50% ownership interest in Cipura in exchange for issuing 644,828 C2 ordinary shares of SHHL with an aggregate fair value of $9 million (the “Cipura Acquisition”). The fair value of the SHHL C2 ordinary shares was derived by using an implied valuation of $13.49 per share, as described above. In connection with the Cipura Acquisition, the Company derecognized its previous 50% ownership interest in Cipura, which was remeasured to fair value; as a result, the Company recognized a gain of $7 million, which is included in gain on sale of property and other, net in the consolidated statements of operations for the fiscal year ended January 2, 2022. The fair value of the Company’s previously held interest was determined based upon the purchase consideration for the remaining 50% ownership interest.

 

The Cipura Acquisition was accounted for as a business combination under the acquisition method of accounting. As a result, the Company initially recognized less than $1 million of cash and cash equivalents, less than $1 million of net working capital liabilities, $1 million of property and equipment, $3 million of intangible assets (consisting of an indefinite-lived trade name), less than $1 million of deferred tax liabilities, and $4 million of right-of-use assets and $5 million of related lease liabilities. In addition, prior to the acquisition, the Company funded certain costs on behalf of Cipura and therefore recorded a balance due from Cipura of $2 million as of the acquisition date. Upon consolidating Cipura on May 10, 2021, the Company’s receivable balance was effectively settled as a pre-existing relationship, with a corresponding increase in the amount of goodwill recognized from the transaction.

 

As a result of the acquisition, the Company recognized goodwill of $17 million, which represents intellectual capital, know-how for potential future openings and undertakings, and economic benefits that the Company expects to derive from the ability to expand the Mandolin Aegean Bistro brand that do not qualify for separate recognition. The entire value of goodwill has been allocated to a

separate reporting unit in our North America segment which did not have any goodwill prior to the Cipura Acquisition. The recognized goodwill is not deductible for tax purposes. During the third quarter of Fiscal 2021, the Company recorded adjustments to certain previous preliminary estimated fair values which resulted in recognition of an additional operating lease right-of-use asset and associated lease liability of $1 million, a less than $1 million increase in intangible assets, a less than $1 million increase in deferred tax liabilities, and a less than $1 million reduction in goodwill.

 

The consolidated financial statements include the results of Cipura from May 10, 2021 through January 2, 2022, however such results are considered immaterial to the overall operations of the Company. The consolidated statement of operations for the fiscal year ended January 2, 2022 also includes less than $1 million in acquisition related costs, which were expensed as incurred and are included in general and administrative expense.

 

Mandolin Acquisition

 

On May 10, 2021, the Company acquired the intellectual property rights for Mr. Mandolin and Mrs. Mandolin (the “Mandolin IP”) in exchange for issuing 92,647 C2 ordinary shares of SHHL with an aggregate fair value of $1 million (the “Mandolin Acquisition”). The fair value of the C2 ordinary shares was derived by using an implied valuation of $13.49, as described above. The Mandolin Acquisition was accounted for as an asset purchase, and the Mandolin IP has been recorded in other intangible assets, net on the consolidated balance sheet as of January 1, 2023.

 

Soho Works North America Acquisition

 

On May 10, 2021, the Company issued 3,984,883 C2 ordinary shares of SHHL with an aggregate fair value of $54 million to SW SPV, LLC (the “SW Seller”) in order to acquire the SW Seller’s 30% equity ownership interest in Soho Works North America, LLC (the “Soho Works Acquisition”). The fair value of the SHHL C2 ordinary shares was derived by using an implied valuation of $13.49 per share, as described above. Prior to the Soho Works Acquisition, the Company held a controlling interest in and therefore consolidated Soho Works North America, LLC. The Soho Works Acquisition was accounted for as a transaction with a noncontrolling interest holder that did not result in a loss of control. The Company derecognized noncontrolling interest of $33 million and recorded the difference between the fair value of consideration transferred to the SW Seller of $54 million and the carrying value of the noncontrolling interest as a reduction in additional paid-in capital (i.e. a deemed distribution in the absence of retained earnings). Following the Soho Works Acquisition, the Company became the sole equity owner of Soho Works North America, LLC.

 

LINE and Saguaro Acquisition

 

On June 22, 2021 the Company entered into a membership interests purchase agreement with Sydell Group LLC (“Sydell”) to acquire all of the outstanding shares in the companies that together operate existing and future “The LINE” and “Saguaro” hotels in the United States (the “LINE and Saguaro Acquisition”). The hotels that are currently operational are located in Los Angeles, Washington DC, Austin, Palm Springs and San Francisco (opened September 2022), and between them offer a variety of food and beverage offerings together with approximately 1,500 hotel rooms. The Company issued 1,900,599 C2 ordinary shares of SHHL with an aggregate fair value of $26 million as consideration for the LINE and Saguaro Acquisition. The fair value of the SHHL C2 ordinary shares was derived by using an implied valuation of $13.49 per share, as described above.

 

The LINE and Saguaro Acquisition was accounted for as a business combination under the acquisition method of accounting. The only acquired identifiable assets are related to the hotel management agreements intangible asset, which has a total fair value of $24 million and an estimated useful life of 15 years. The hotel management agreements were valued using the multi-period excess-earnings method, with key inputs consisting of the forecasted hotel management fees (including the probability of renewal of the hotel management agreements), profitability margins, and discount rate applied to the estimated net cash flows. The Company did not acquire any other assets or assume any other liabilities.

 

As a result of the LINE and Saguaro Acquisition, the Company recognized $2 million of goodwill, which represents the fair value of the assembled workforce that is not separately recognized from goodwill and the economic benefits that the Company expects to derive from the ability to expand the hotel management agreements that do not qualify for separate recognition. In addition, the goodwill relates to the synergies expected to be gained from the affiliation of the LINE hotels with the Soho House brand name. The entire value of goodwill has been allocated to a separate reporting unit in our North America segment which did not have any goodwill prior to the LINE and Saguaro Acquisition. The recognized goodwill is deductible for tax purposes.

 

The consolidated financial statements include the results of the acquired business from June 22, 2021 through January 2, 2022, however such results are considered immaterial to the overall operations of the Company. The consolidated statement of operations for the fiscal year ended January 2, 2022 also includes $1 million in acquisition related costs, which were expensed as incurred and are included in general and administrative expense.

 

The SHHL C2 ordinary shares issued in the transactions described above were exchanged for Class A common stock of MCG in connection with our IPO in July 2021, as further described in Note 1, Nature of the Business.
v3.22.4
Consolidated Variable Interest Entities
 12 Months Ended
Jan. 01, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Consolidated Variable Interest Entities
4.
Consolidated Variable Interest Entities

 

The Company determined that it is the primary beneficiary of the following material variable interest entities (“VIEs”): Ned-Soho House, LLP and Soho Works Limited.

 

Prior to March 2022, Soho Restaurants Limited (“Soho Restaurants”) was accounted for as a VIE and the Company was the primary beneficiary. Following the Soho Restaurants Acquisition described in Note 3, Acquisitions, the Company became the sole equity owner of Soho Restaurants, controls all voting rights and holds exposure to all of the economics of the entity as a result of Soho Restaurants being a wholly-owned subsidiary of the Company. Following the Soho Restaurants Acquisition, Soho Restaurants is no longer considered a VIE.

 

Prior to May 2021, Soho Works North America, LLC (“SWNA”) was accounted for as a VIE and the Company was the primary beneficiary. Following the SWNA Acquisition described in Note 3, Acquisitions, the Company controls all voting rights and has exposure to all of the economics of the entity as a result of SWNA being a wholly-owned subsidiary of the Company. Following the SWNA Acquisition, SWNA is no longer considered a VIE.

 

Ned-Soho House, LLP

 

The Ned-Soho House, LLP joint venture maintains a management agreement to operate The Ned, which is owned by unconsolidated related parties to the Company. Management fees are recognized in other revenues in the consolidated statements of operations. The Company has a higher economic interest in Ned Soho House, LLP as compared to its related party venture partner and therefore the Company is determined to be the primary beneficiary.

 

Soho Works Limited

 

The Soho Works Limited (“SWL”) joint venture develops and operates Soho-branded, membership-based co-working spaces, with five sites currently in operation in the UK. The joint venture agreement relates to the UK only. The joint venture was formed on September 29, 2017 when the Company granted to two unrelated individuals an option to subscribe for 30% of the issued shares of SWL. The option has not yet been exercised and, consequently, the Company has 100% economic interest in SWL. Upon exercise of the option, the Company would have 70% economic interest in SWL. The options carry voting rights such that the Company and other joint venture partners each hold 50% of the voting rights in respect of shareholder resolutions and certain reserved matters as defined in the joint venture agreement. The Company is determined to be the primary beneficiary because it has the power to direct all significant activities of the joint venture.

 

The following table summarizes the carrying amounts and classification of the consolidated VIEs’ assets and liabilities included in the consolidated balance sheets. The obligations of the consolidated VIEs other than Soho Restaurants Limited are non-recourse to the Company, and the assets of the VIEs can be used only to settle those obligations.

 

 

 

As of

(in thousands)

 

January 1, 2023

 

January 2, 2022

Cash and cash equivalents

 

$7,941

 

$2,986

Accounts receivable

 

1,823

 

3,407

Inventories

 

19

 

14

Prepaid expenses and other current assets

 

3,283

 

4,608

Total current assets

 

13,066

 

11,015

Property and equipment, net

 

32,288

 

43,501

Operating lease assets

 

99,717

 

114,522

Other intangible assets, net

 

284

 

160

Other non-current assets

 

181

 

204

Total assets

 

145,536

 

169,402

Accounts payable

 

337

 

1,011

Accrued liabilities

 

8,131

 

8,752

Indirect and employee taxes payable

 

1,548

 

—

Current portion of related party loans

 

24,612

 

21,092

Current portion of operating lease liabilities - sites trading more than one year

 

4,362

 

4,507

Other current liabilities

 

4,153

 

2,021

Total current liabilities

 

43,143

 

37,383

Operating lease liabilities, net of current portion - sites trading more than one year

 

115,182

 

133,753

Other non-current liabilities

 

—

 

—

Total liabilities

 

158,325

 

171,136

Net assets

 

$(12,789)

 

$(1,734)
v3.22.4
Equity Method Investments
 12 Months Ended
Jan. 01, 2023
Equity Method Investments and Joint Ventures [Abstract]  
Equity Method Investments
5.
Equity Method Investments

 

The Company maintains a portfolio of equity method investments owned through noncontrolling interests in investments with one or more partners. Equity method investment ownership interests in each of the periods presented in these consolidated financial statements are as follows:

 

 

Ownership Interest (Percentage)

 

Equity Method Investment

January 1, 2023

 

 

January 2, 2022

 

 

January 3, 2021

 

Soho House Toronto (House)*

 

 

 

 

 

 

 

 

Soho House Toronto Partnership

 

50

 

 

 

50

 

 

 

50

 

Soho House—Cipura (Miami) (Restaurant)(1)

 

 

 

 

 

 

 

 

Soho House—Cipura (Miami), LLC

n/a

 

 

n/a

 

 

 

50

 

139 Ludlow Street New York (Property)

 

 

 

 

 

 

 

 

139 Ludlow Acquisition, LLC

 

33.3

 

 

 

33.3

 

 

 

33.3

 

56-60 Redchurch Street, London (Property and Hotel)*

 

 

 

 

 

 

 

 

Raycliff Red LLP

 

50

 

 

 

50

 

 

 

50

 

Raycliff Shoreditch Holdings LLP

 

50

 

 

 

50

 

 

 

50

 

Redchurch Partner Limited

 

50

 

 

 

50

 

 

 

50

 

Soho House Barcelona (Property and House)*

 

 

 

 

 

 

 

 

Mimea XXI S.L.

 

50

 

 

 

50

 

 

 

50

 

Mirador Barcel S.L.

 

50

 

 

 

50

 

 

 

50

 

Little Beach House Barcelona S.L.

 

50

 

 

 

50

 

 

 

50

 

Soho Beach House Canouan (House)

 

 

 

 

 

 

 

 

Soho Beach House Canouan Limited

 

20

 

 

 

20

 

 

 

—

 

*Variable interest entity

 

 

 

 

 

 

 

 

 

(1)
During Fiscal 2021, the Company acquired the remaining 50% interest in Cipura and had 100% ownership of the investment as of January 2, 2022. The entity became a consolidated subsidiary of the Company beginning on the date of acquisition, as described in Note 3, Acquisitions.

 

Under applicable guidance for VIEs, the Company determined that its investments in Soho House Toronto Partnership ("Soho House Toronto") and the entities comprising 56-60 Redchurch Street, London are VIEs. Soho House Toronto owns and operates a House

located in Toronto, while 56-60 Redchurch Street, London provides additional members’ accommodation capacity for Shoreditch House in London.

 

Toronto Joint Venture

 

On March 28, 2012, the Company and two unrelated investors (“Toronto Partners”) formed Soho House Toronto to establish and operate a house in Toronto, Canada. The Company is responsible for managing the development and operations of the property with key operating decisions requiring joint approval with the Toronto Partners. The Company owns a 50% interest and each of the Toronto Partners owns a 25% interest in Soho House Toronto. Each investor is entitled to a share of the profits or losses of Soho House Toronto in proportion to their respective ownership percentage. As part of the original agreement, the Toronto Partners received a put option to sell their interest in Soho House Toronto to the Company at fair value and the Company received a call option to purchase the Toronto Partners' interests at fair value. As of 2015, certain restrictions expired and the put and call options are exercisable. As of January 1, 2023, no options have been exercised.

 

Soho House Toronto entered into a 10-year lease agreement with a landlord to lease the property. This lease was extended for an additional 5 years in Fiscal 2021. A subsidiary of the Company provided a guarantee to the landlord for Soho House Toronto's rental liabilities.

 

Barcelona Joint Venture

 

On January 28, 2014, the Company and an unrelated development partner (“Barcelona Partner”) formed Mimea XXI, S.L.U. (“Mimea”) to establish and operate Soho House Barcelona in Barcelona, Spain. Soho House Barcelona is owned by Mirador Barcel S.L., a subsidiary of Mimea. Each partner has a 50% interest in Soho House Barcelona through the indirect ownership of ordinary shares. Internal allocation of profits in relation to running Soho House Barcelona, calculated as defined in the contract, is shared between the Company and Barcelona Partner based on their respective ownership percentage. All remaining profits or losses of Soho House Barcelona are attributed solely to the Company in return for managing the operations. In addition, the Barcelona Partner received certain development related fees for the development of the property. Following its redevelopment and opening of the Soho House Barcelona, the Company agreed to meet certain performance targets (see Note 18, Commitments and Contingencies). On June 4, 2020, the Company entered into an amended shareholders agreement as a result of a newly formed joint venture to operate Little Beach House Barcelona, a private members club and hotel developed at the existing Barcelona property. Little Beach House Barcelona is a newly formed subsidiary under Mimea. As a result of the reorganization and amendments to the shareholders agreement, the Company determined that the entities comprising the Barcelona joint venture are not VIEs, and the investment is accounted for under the equity-method. During the fiscal year ended January 2, 2022, the Company advanced an additional $8 million, respectively, to the Soho House Barcelona joint venture. There were no advances in fiscal year ended January 1, 2023.

 

56-60 Redchurch Street, London Joint Venture

 

On July 6, 2015, the Company and an unrelated investor (“Raycliff Partner”) formed Raycliff Red LLP (“Club Row Rooms”) to develop and operate a hotel at 58-60 Redchurch Street intended to provide additional members’ accommodation to the nearby Shoreditch House in London. This was later extended to include 56 Redchurch Street under the same terms. The Company is responsible for managing the operations of the property and the Raycliff Partner is responsible for managing the building. Each partner has a 50% interest in Club Row Rooms through equal ownership of B units. The Raycliff Partner owns all A units. All profits and losses from operations are shared between parties based on their respective ownership of B units. Distributions from cash flows not generated from operations are first allocated to holders of A units (for an amount of up to £500,000), with the remainder distributed to holders of B units in proportion to their holdings. Under a hotel management agreement and restaurant management agreement between the Company and Club Row Rooms, the Company also receives a 2.5% management fee in return for managing the hotel operations and a 3.5% management fee in return for managing the restaurant operations of the property. The amounts received to date under this agreement are immaterial. Club Row Rooms, which owns the rights to the property, financed the development of the property through third-party debt. The Company has entered into a security arrangement with the bank in relation to this debt (see Note 18, Commitments and Contingencies).

 

The Raycliff Partner holds a put option which requires the Company to purchase all the Raycliff Partner’s interest at fair value in the event the Company ceases to own a controlling interest in the nearby Shoreditch House. As of January 1, 2023, the put option has not been triggered.

 

The Company concluded that it is not the primary beneficiary of the Soho House Toronto or 56-60 Redchurch Street, London VIEs in any of the periods presented, as its joint venture partners have the power to participate in making decisions related to the majority of significant activities of each investee. Accordingly, the Company concluded that application of the equity method of accounting is appropriate for these investees. Barcelona was previously determined to be a VIE; however, the execution of amended governing documents in June 2020 constitutes a reconsideration event and Barcelona no longer meets the VIE criteria.

 

Summarized Financial Information

 

The following tables present summarized financial information for all unconsolidated equity method investees. The Company’s maximum exposure to losses related to its equity method investments is limited to its ownership interests as well as certain guarantees as described in Note 18, Commitments and Contingencies.

 

 

 

For the Fiscal Year Ended

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022 (1)

 

 

January 3, 2021

 

Revenues

 

$

45,274

 

 

$

32,022

 

 

$

30,547

 

Operating income (loss)

 

 

7,131

 

 

 

(4,442

)

 

 

(3,923

)

Net income (loss)(2)

 

 

3,133

 

 

 

(5,227

)

 

 

(6,737

)
(1)
Includes the financial information of Cipura through May 10, 2021.
(2)
The net income / (loss) shown above relates entirely to continuing operations.

 

 

 

As of

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022

 

Current assets

 

$

18,916

 

 

$

33,705

 

Non-current assets

 

 

142,324

 

 

 

137,753

 

Total assets

 

 

161,240

 

 

 

171,458

 

Current liabilities

 

 

8,551

 

 

 

13,976

 

Non-current liabilities

 

 

101,820

 

 

 

121,311

 

Total liabilities

 

 

110,371

 

 

 

135,287

 

Net assets

 

$

50,869

 

 

$

36,171

 
v3.22.4
Leases
 12 Months Ended
Jan. 01, 2023
Leases [Abstract]  
Leases
6.
Leases

 

The Company has entered into various lease agreements for its Houses, hotels, restaurants, spas and other properties across North America, Europe, and Asia. Additionally, the Company entered into 13 equipment leases during 2022. The Company’s material leases have reasonably assured lease terms ranging from 1 year to 30 years for operating leases and 50 years for finance leases. Certain operating leases provide the Company with multiple renewal options that generally range from 5 years to 10 years, with rent payments on renewal based on a predetermined annual increase or market rates at the time of exercise of the renewal. The Company has 3 material finance leases with 25-year renewal options, with rent payments on renewal based on upward changes in inflation rates. As of January 1, 2023, the Company recognized right-of-use assets and lease liabilities for 115 operating leases and 3 finance leases. When recognizing right-of-use assets and lease liabilities, the Company includes certain renewal options where the Company is reasonably assured to exercise the renewal option.

 

The maturity of the Company’s operating and finance lease liabilities as of January 1, 2023 is as follows:

 

(in thousands)
Fiscal year ended

 

Operating
Leases

 

 

Finance
Leases

 

Undiscounted lease payments

 

 

 

 

 

 

2023

 

$

133,942

 

 

$

5,734

 

2024

 

 

137,792

 

 

 

5,735

 

2025

 

 

140,910

 

 

 

5,774

 

2026

 

 

141,807

 

 

 

5,699

 

2027

 

 

133,194

 

 

 

5,699

 

Thereafter

 

 

1,619,510

 

 

 

216,541

 

Total undiscounted lease payments

 

 

2,307,155

 

 

 

245,182

 

Present value adjustment

 

 

1,058,079

 

 

 

168,544

 

Total net lease liabilities

 

$

1,249,076

 

 

$

76,638

 

 

Certain lease agreements include variable lease payments that, in the future, will vary based on changes in the local inflation rates, market rate rents, or business revenues of the leased premises.

 

Straight-line rent expense recognized as part of in-House operating expenses for operating leases was $133 million, $117 million, and $110 million for the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021 respectively. Variable lease payments recognized as part of In-House operating expense for operating leases were $20 million, $6 million, and $3 million for the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021, respectively, including non-lease components such as common area maintenance fees.

 

For the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021 the Company recognized amortization expense related to the right-of-use asset for finance leases of $2 million, $2 million, and $2 million respectively, and interest expense related to finance leases of $5 million, $5 million, and $5 million respectively. There were no material variable lease payments for finance leases for the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021.

 

New Houses typically have a maturation profile that commences sometime after the lease commencement date used in the determination of the lease accounting in accordance with Topic 842. The consolidated balance sheets set out the operating lease liabilities split between sites trading less than one year and sites trading more than one year. “Sites trading less than one year” and “sites trading more than one year” reference sites that have been open (as measured from the date the site first accepted a paying guest) for a period less than one year from the balance sheet date and those that have been open for a period longer than one year from the balance sheet date.

 

The following information represents supplemental disclosure for the statement of cash flows related to operating and finance leases:

 

 

 

For the Fiscal Year Ended

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022

 

 

January 3, 2021

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

 

 

 

 

 

 

Operating cash flows from operating leases

 

$

(118,269

)

 

$

(86,523

)

 

$

(67,412

)

Interest payments for finance leases

 

 

(5,002

)

 

 

(5,037

)

 

 

(5,112

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

Principal payments for finance leases

 

$

(528

)

 

$

(281

)

 

$

(230

)

Supplemental disclosures of non-cash investing and financing activities:

 

 

 

 

 

 

 

 

 

Operating lease assets obtained in exchange for new operating lease liabilities

 

$

133,743

 

 

$

170,105

 

 

$

67,235

 

Acquisitions of property and equipment under finance leases

 

 

12,315

 

 

 

—

 

 

 

—

 

 

The following summarizes additional information related to operating and finance leases:

 

 

 

As of

 

 

January 1, 2023

 

January 2, 2022

Weighted-average remaining lease term

 

 

 

 

Finance leases

 

43 years

 

44 years

Operating leases

 

17 years

 

18 years

Weighted-average discount rate

 

 

 

 

Finance leases

 

7.29%

 

7.00%

Operating leases

 

7.93%

 

8.06%

 

As of January 1, 2023, the Company has entered into 17 operating lease agreements that are signed but have not commenced. Of these, 11 relate to Houses, hotels, restaurants, and other properties that are in various stages of construction by the Landlord. The Company will determine the classification as of the lease commencement date, but currently expects these under construction leases to be operating leases. SHD is involved to varying degrees in the design of these leased properties under construction. For certain of these leases, the SHD team is acting as the construction manager on behalf of the landlord. The Company does not control the underlying assets under construction. Pending significant completion of all landlord improvements and final execution of the related lease, the Company expects these leases to commence in fiscal years ending 2023, 2024 and 2025. The Company estimates the total undiscounted lease payments for the leases commencing in fiscal years 2023, 2024 and 2025 will be $286 million, $866 million, and $320 million, respectively, with weighted-average expected lease terms of 24 years, 18 years, and 15 years for 2023, 2024 and 2025, respectively.

 

The following summarizes the Company’s estimated future undiscounted lease payments for current leases signed but not commenced, including properties where the SHD team is acting as the construction manager:

 

(in thousands)

 

Operating
Leases Under

 

Fiscal year ended

 

Construction

 

Estimated total undiscounted lease payments

 

 

 

2023

 

$

4,342

 

2024

 

 

27,252

 

2025

 

 

59,323

 

2026

 

 

73,904

 

2027

 

 

77,513

 

Thereafter

 

 

1,229,816

 

Total undiscounted lease payments expected for leases signed but not commenced

 

$

1,472,150

 

 

Financing Obligation

 

In April 2017, the Company entered into an agreement to sell a property in downtown Los Angeles (“DTLA property”) for $30 million with $9 million contingently held back by the buyer. The Company simultaneously entered into an agreement to lease the land and building back from the buyer. As an incentive to enter the lease, the buyer has committed to provide an additional $59 million of funding towards the development of the property, which includes the contingent proceeds held back upon the sale. This lease agreement has an original lease term of 20 years, with two 10-year renewal options. The lease payments for the original lease term and both renewal options, if exercised, are $6.4 million per year, adjusted upward for local inflation rates that will not be less than 2% increase per year.

 

The Company determined that the buyer/lessor did not obtain control of the property after the sale and will not obtain control throughout the construction period and subsequent leaseback period. Therefore, the transaction is accounted for as a financing obligation, and the Company will continue to recognize the building on its consolidated balance sheets. The Company also recognized a financing obligation for any funding received from the buyer/lessor along with accrued interest over the construction period. There was no current portion of the financing obligation as of January 1, 2023 and January 2, 2022. The non-current portion of the financing obligation was $76 million and $76 million as of January 1, 2023 and January 2, 2022, respectively.

 

Costs incurred related to the development of the property were capitalized as incurred as a component of construction in progress. At the end of September 2019, the construction was complete and the property opened for business. Upon completion of construction, the balance of construction in progress was reclassified to depreciable asset classes within property and equipment, net. After the

completion of construction, the Company expenses interest using the effective interest method in the period incurred. As of January 1, 2023 and January 2, 2022, the Company has capitalized $85 million and $87 million, respectively, pertaining to the DTLA property.

 

The following information represents supplemental disclosure for the statement of cash flows related to the financing obligation for the DTLA property:

 

 

For the Fiscal Year Ended

 

(in thousands)

January 1, 2023

 

 

January 2, 2022

 

 

January 3, 2021

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

Interest payments for financing obligation

$

 

(6,894

)

 

$

 

(5,626

)

 

$

 

(6,626

)

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

 

Capitalized interest

$

 

—

 

 

$

 

—

 

 

$

 

—

 

Purchase of property and equipment

 

 

—

 

 

 

 

—

 

 

 

 

—

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

 

Principal payments on financing obligation

$

 

(1,578

)

 

$

 

(1,334

)

 

$

 

—

 

Proceeds from financing obligation

 

 

—

 

 

 

 

—

 

 

 

 

3,652

 

 

The following summarizes the Company's future undiscounted lease payments for the DTLA property:

 

(in thousands)

Financing Obligation

 

Fiscal year ended

 

 

Undiscounted lease payments

 

 

2023

$

7,031

 

2024

 

7,172

 

2025

 

7,316

 

2026

 

7,462

 

2027

 

7,611

 

Thereafter

 

116,442

 

Total undiscounted lease payments

 

153,034

 

Present value adjustment

 

76,795

 

Total net financing obligation

$

76,239

 
v3.22.4
Revenue Recognition
 12 Months Ended
Jan. 01, 2023
Revenue Recognition [Abstract]  
Revenue Recognition
7.
Revenue Recognition

 

Disaggregated revenue disclosures for the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021 are included in Note 21, Segments.

 

Revenue from membership fees, legacy one-time registration fees, house introduction credits and build-out contracts are the only arrangements for which revenue is recognized over time. Revenue from these sources combined accounted for 30%, 36%, and 50% of the Company's revenue for the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021, respectively.

 

The following table includes estimated revenues expected to be recognized in the future related to performance obligations that were unsatisfied (or partially unsatisfied) at the end of the reporting period ending January 1, 2023.

 

(in thousands)

January 1, 2023

 

 

Future periods

 

Membership, registration fees, and House Introduction Credits

$

78,308

 

 

$

27,118

 

Total future revenues

$

78,308

 

 

$

27,118

 

 

All consideration from contracts with customers is included in the amounts presented above.

 

The following table provides information about contract receivables, contract assets and contract liabilities from contracts with customers:

 

 

 

As of

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022

 

Contract receivables

 

$

42,215

 

 

$

19,338

 

Contract assets

 

 

9,344

 

 

 

5,553

 

Contract liabilities

 

 

130,975

 

 

 

113,630

 

 

Contract assets consist of accrued unbilled income related to build-out contracts and are recognized in prepaid expenses and other current assets on the consolidated balance sheets. Refer to Note 8, Prepaid Expenses and Other Current Assets. All contract assets recognized as of January 3, 2021 of $8 million were billed to customers and transferred to receivables as of January 2, 2022. All contract assets as of January 2, 2022 of $6 million were billed to customers and transferred to receivables as of January 1, 2023.

 

Contract liabilities include deferred membership revenue, hotel deposits (which are presented in accrued liabilities on the consolidated balance sheets), and gift vouchers. Significant changes in contract liabilities balances during the period are as follows:

 

 

 

For the Fiscal Year Ended

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022

 

 

January 3, 2021

 

Opening balance

 

$

113,630

 

 

$

85,723

 

 

$

93,731

 

Revenue recognized that was included in the contract liability balance at the beginning of the period

 

 

(86,111

)

 

 

(61,763

)

 

 

(71,425

)

Increases due to cash received during the period

 

 

104,652

 

 

 

89,914

 

 

 

62,880

 

Foreign currency translation

 

 

(1,196

)

 

 

(244

)

 

 

537

 

Closing balance

 

$

130,975

 

 

$

113,630

 

 

$

85,723

 
v3.22.4
Prepaid Expenses and Other Current Assets
 12 Months Ended
Jan. 01, 2023
Prepaid Expense and Other Assets, Current [Abstract]  
Prepaid Expenses and Other Current Assets
8.
Prepaid Expenses and Other Current Assets

 

The table below presents the components of prepaid expenses and other current assets.

 

 

 

As of

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022

 

Amounts owed by equity method investees

 

$

1,492

 

 

$

879

 

Prepayments and accrued income

 

 

27,416

 

 

 

26,037

 

Contract assets

 

 

9,344

 

 

 

5,553

 

Other receivables

 

 

52,849

 

 

 

24,535

 

Total prepaid expenses and other current assets

 

$

91,101

 

 

$

57,004

 
v3.22.4
Property and Equipment, Net
 12 Months Ended
Jan. 01, 2023
Property, Plant and Equipment [Abstract]  
Property and Equipment, Net
9.
Property and Equipment, Net

 

Property and equipment is comprised of the following:

 

 

 

As of

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022

 

Land and buildings

 

$

213,901

 

 

$

216,540

 

Leasehold improvements

 

 

353,181

 

 

 

300,821

 

Fixtures and fittings

 

 

336,758

 

 

 

287,866

 

Office equipment and other

 

 

42,660

 

 

 

41,176

 

Construction in progress

 

 

20,394

 

 

 

81,208

 

Finance property lease

 

 

64,521

 

 

 

73,110

 

 

 

 

1,031,415

 

 

 

1,000,721

 

Less: Accumulated depreciation

 

 

(384,414

)

 

 

(315,760

)

 

 

$

647,001

 

 

$

684,961

 

 

 

The Company recorded depreciation expense of $81 million, $69 million, and $56 million in the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021, respectively, which is included in depreciation and amortization in the accompanying consolidated statements of operations.

 

The Company reviews long-lived assets for impairment when changes in circumstances indicate that the asset's carrying value may not be recoverable. As a result of the COVID-19 pandemic and the related temporary House closures in Fiscal 2020, the Company reviewed its long-lived assets for impairment and determined there were no recoverability concerns, except for Little House Mayfair Apartments, the carrying value of which was determined to not be recoverable. As a result, the Company calculated the fair value of Little House Mayfair Apartments and recognized an impairment loss of less than $1 million during the fiscal year ended January 3, 2021.
v3.22.4
Goodwill and Intangible Assets
 12 Months Ended
Jan. 01, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets
10.
Goodwill and Intangible Assets

 

A summary of goodwill for each of the Company’s applicable reportable segments from December 29, 2019 to January 1, 2023 is as follows:

 

(in thousands)

 

UK

 

 

North America

 

 

Europe and
ROW

 

 

Total

 

December 29, 2019

 

$

97,372

 

 

$

28,780

 

 

$

65,025

 

 

$

191,177

 

Foreign currency translation adjustment

 

 

4,230

 

 

 

—

 

 

 

6,075

 

 

 

10,305

 

January 3, 2021

 

$

101,602

 

 

$

28,780

 

 

$

71,100

 

 

$

201,482

 

Cipura Acquisition (Note 3)

 

 

—

 

 

 

16,623

 

 

 

—

 

 

 

16,623

 

LINE and Saguaro Acquisition (Note 3)

 

 

—

 

 

 

2,043

 

 

 

—

 

 

 

2,043

 

Foreign currency translation adjustment

 

 

(937

)

 

 

—

 

 

 

(4,954

)

 

 

(5,891

)

January 2, 2022

 

$

100,665

 

 

$

47,446

 

 

$

66,146

 

 

$

214,257

 

Foreign currency translation adjustment

 

 

(10,690

)

 

 

—

 

 

 

(3,921

)

 

 

(14,611

)

January 1, 2023

 

$

89,975

 

 

$

47,446

 

 

$

62,225

 

 

$

199,646

 

 

The opening goodwill balance originates from the acquisition of Soho House Holdings Limited by affiliates of the Yucaipa Companies, LLC, as described in Note 2, Summary of Significant Accounting Policies – Goodwill. There were no goodwill impairment charges during the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021.

 

A summary of finite-lived intangible assets as of January 1, 2023 and January 2, 2022 is as follows:

 

 

 

 

As of

 

 

 

 

January 1, 2023

 

 

January 2, 2022

 

(in thousands)

Average Amortization Period (in years)

 

Gross Carrying Value

 

 

Accumulated Amortization

 

 

Net Carrying Value

 

 

Gross Carrying Value

 

 

Accumulated Amortization

 

 

Net Carrying Value

 

Brand

24

 

$

109,420

 

 

$

50,358

 

 

$

59,062

 

 

$

114,784

 

 

$

45,749

 

 

$

69,035

 

Membership list

20

 

 

15,748

 

 

 

8,890

 

 

 

6,858

 

 

 

16,144

 

 

 

8,131

 

 

 

8,013

 

Hotel management agreements

15

 

 

23,600

 

 

 

2,401

 

 

 

21,199

 

 

 

23,600

 

 

 

828

 

 

 

22,772

 

Website, internal-use software development costs, and other

7

 

 

72,813

 

 

 

33,964

 

 

 

38,849

 

 

 

57,563

 

 

 

25,225

 

 

 

32,338

 

 

 

 

$

221,581

 

 

$

95,613

 

 

$

125,968

 

 

$

212,091

 

 

$

79,933

 

 

$

132,158

 

 

Refer to Note 3, Acquisitions, for information on additional intangible assets recognized during the fiscal year ended January 2, 2022 in connection with the Cipura Acquisition, Mandolin Acquisition, and the LINE and Saguaro Acquisition.

 

Accumulated amortization as of January 1, 2023 totaled $50 million for Brand, $9 million for Membership list, $2 million for hotel management agreement, and $34 million for Website, internal-use software development costs, and other. Accumulated amortization as of January 2, 2022 totaled $46 million for Brand, $8 million for Membership list, $1 million for hotel management agreement, and $25 million for Website, internal-use software development costs, and other.

 

Included within website, internal-use software development costs, and other are capitalized website development costs and internal-use software, net of accumulated amortization, which totaled $35 million and $29 million as of January 1, 2023 and January 2, 2022, respectively.

 

Amortization expense related to the intangible assets totaled $19 million, $15 million, and $14 million in the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021, respectively. The following table represents estimated aggregate amortization expense for each of the next five fiscal years:

 

(in thousands)

 

 

 

2023

$

 

19,863

 

2024

 

 

17,314

 

2025

 

 

15,167

 

2026

 

 

11,064

 

2027

 

 

7,795

 

 
v3.22.4
Accrued Liabilities and Other Current Liabilities
 12 Months Ended
Jan. 01, 2023
Payables and Accruals [Abstract]  
Accrued Liabilities and Other Current Liabilities
11.
Accrued Liabilities and Other Current Liabilities

 

The table below presents the components of accrued liabilities.

 

 

 

As of

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022

 

Accrued interest

 

$

440

 

 

$

727

 

Hotel deposits

 

 

11,758

 

 

 

9,246

 

Trade, capital and other accruals

 

 

71,914

 

 

 

53,154

 

Total accrued liabilities

 

$

84,112

 

 

$

63,127

 

 

Included in trade, capital and other accruals is zero and $1 million as of January 1, 2023 and January 2, 2022, respectively, related to social security taxes that were deferred as a result of government relief afforded by the COVID-19 pandemic which have not yet been paid.
v3.22.4
Debt
 12 Months Ended
Jan. 01, 2023
Debt Disclosure [Abstract]  
Debt
12.
Debt

 

 

Debt balances, net of debt issuance costs, are as follows:

 

 

 

As of

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022

 

Senior Secured Notes, interest at 8.1764% for the Initial Notes and 8.5% for the Additional Notes, maturing March 2027

 

$

570,712

 

 

$

447,719

 

Other loans (see additional description below)

 

 

10,197

 

 

 

18,547

 

 

 

 

580,909

 

 

 

466,266

 

Less: Current portion of long-term debt

 

 

(1,005

)

 

 

(6,923

)

Total long-term debt, net of current portion

 

$

579,904

 

 

$

459,343

 

 

Property mortgage loans, net of debt issuance costs, are as follows:

 

 

 

As of

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022

 

Term loan, interest at 5.34%, maturing February 6, 2024

 

$

54,614

 

 

$

54,293

 

Mezzanine loan, interest at 7.25%, maturing February 6, 2024

 

 

61,573

 

 

 

60,829

 

Total property mortgage loans

 

$

116,187

 

 

$

115,122

 

 

Related party loans, net of current portion and imputed interest, are as follows:

 

 

 

As of

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022

 

Related party loans, unsecured, 7% interest bearing, maturing September 2023 (see additional description below)

 

$

24,612

 

 

$

21,092

 

Related party loans, unsecured, 4% interest bearing, maturing December 2022

 

 

—

 

 

 

569

 

 

 

 

24,612

 

 

 

21,661

 

Less: Current portion of related party loans

 

 

(24,612

)

 

 

(21,661

)

Total related party loans, net of current portion

 

$

—

 

 

$

—

 

 

The weighted-average interest rate on fixed rate borrowings was 8% as of January 1, 2023 and as of January 2, 2022. The were no outstanding floating rate borrowings as of January 1, 2023 or January 2, 2022.

 

Debt

 

The descriptions below show the financial instrument amounts in the currency of denomination with USD equivalent in parentheses, where applicable, translated using the exchange rates in effect at the time of the respective transaction.

 

On December 5, 2019, the Company entered into a £55 million ($72 million) floating rate revolving credit facility (the "Revolving Credit Facility") with a maturity date of January 25, 2022. In April 2020, the Company secured an additional £20 million ($25 million) of liquidity under this facility and extended the maturity until January 2023. During the fiscal year ended January 2, 2022, the Company repaid the entire outstanding balance of the facility with proceeds from the IPO. As of January 1, 2023, £71 million ($86 million) is available to draw under this facility, with £4m ($5 million) utilized as a letter of guarantee in respect of one of the Company's lease agreements. The facility is secured on a fixed and floating charge basis over certain assets of the Company. The Company incurred interest expense of $3 million, $3 million, and $4 million on this facility during the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021 respectively. On November 15, 2021, Soho House Bond Limited, a wholly-owned subsidiary of the Company entered into the First Amended and Restated Revolving Facility Agreement (the "First Amendment"). The First Amendment amended the Revolving Credit Facility to, among other things, change the reference rate under the Revolving Credit Facility for borrowings denominated in pounds sterling from a LIBOR-based rate to a SONIA-based rate and to transition reporting from accounting principles generally accepted in the United Kingdom to US GAAP. The First Amendment also reset the Company's Consolidated EBITDA (as defined in the Revolving Credit Facility) test levels, scaling from zero at December 31, 2021 to £32 million ($39 million, if translated using the average exchange rate in effect during the fiscal year ended January 1, 2023) after June 30, 2022. On February 11, 2022, Soho House Bond Limited, a wholly-owned subsidiary of the Company, entered into the Second Amended and Restated Revolving Facility Agreement (the “Second Amendment”), which amends and restates the Revolving Credit Facility. The Second Amendment amends the Revolving Credit Facility to extend the maturity date from January 25, 2023 to January 25, 2024. On November 10, 2022, Soho House Bond Limited, a wholly-owned subsidiary of the Company entered into the Third Amended and Restated Revolving Facility Agreement (the “Third Amendment”), which amends and restates the Revolving Credit Facility. The Third Amendment amends the Revolving Credit Facility to extend the maturity date from January 25, 2024 to July 25, 2026. In addition the Third Amendment provides that from March 2023 we are required to maintain certain leverage covenants (as defined in the Revolving Credit Facility) which are only applicable when 40% or more of the facility is drawn.

 

In April 2017, the Company entered into the Permira Senior Facility, which consisted of a £275 million ($345 million) senior secured loan with an interest rate of LIBOR (subject to a floor of 1%) + 8%. A portion of the interest was in the form of payment-in-kind interest, with the accrued interest being converted to capital outstanding on the loan at each interest payment date. The Permira Senior Facility was secured on a fixed and floating charge basis over the assets of the Company. As of January 3, 2021, the Company had £397 million ($542 million) due under the Permira Senior Facility, which was initially scheduled to mature in April 2022, however the maturity date was subsequently extended until April 2023. The Company incurred interest expense of $13 million and $51 million (including payment-in-kind interest of zero and $26 million) during the fiscal years ended January 2, 2022, and January 3, 2021, respectively. In March 2021, the Company repaid in full the balance outstanding under the Permira Senior Facility, consisting of a GBP tranche with an outstanding principal balance, including accrued payment-in-kind interest, of £368 million ($505 million); a USD tranche with an outstanding principal balance, including accrued payment-in-kind interest, of $8 million, and an EUR tranche with an outstanding principal balance, including accrued payment-in-kind interest, of €45 million ($53 million). As a result of the repayment, the Company recognized a loss on extinguishment of debt of $14 million, consisting of prepayment penalties of $4 million, write-offs of unamortized debt issuance costs of $5 million, and an exit fee of $5 million. Upon repayment of the facility, the

Company also settled accrued payment-in-kind interest totaling $79 million. The loss on extinguishment of debt is reflected in interest expense, net on the consolidated statements of operations for the fiscal year ended January 2, 2022.

 

In January 2018, the Company entered into leases in connection with its Greek Street properties. As part of these leases, the landlord has funded a principal amount of £5 million ($7 million), which represents costs paid directly by the landlord which will be repaid by the Company. Amounts funded by the landlord prior to the lease inception date were initially reflected as accrued liabilities and subsequently converted into long-term debt upon execution of the respective agreements. The Greek Street loans carry interest of 7.5%, are due for repayment in January 2028 and are unsecured. The Company incurred interest expense of less than $1 million during each of the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021.

 

In June 2018, the Company received proceeds of $6.5 million from the landlord of the Soho House Hong Kong property under a loan agreement. The loan had a 5-year term, with an interest rate of LIBOR + 7% payable annually, and all principal payments due at maturity. The Company incurred interest expense of less than $1 million during each of the fiscal years ended January 2, 2022, and January 3, 2021. In September 2021, the Company repaid in full amounts outstanding under the Soho House Hong Kong loan.

 

On April 24, 2020, the Company entered into an unsecured promissory note under the Paycheck Protection Program (the “PPP”), with a principal amount of $22 million. The loan had a January 2023 maturity date and was subject to a 1% interest rate. The PPP was established under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and was administered by the US Small Business Administration (the “SBA”). The Company repaid all amounts outstanding under the US government-backed bank loan in March 2021. The Company incurred interest expense of less than $1 million during each of the fiscal years ended January 2, 2022 and January 3, 2021.

 

On March 31, 2021, Soho House Bond Limited, a wholly-owned subsidiary of the Company, issued pursuant to a Notes Purchase Agreement senior secured notes, which were subscribed for by certain funds managed, sponsored or advised by Goldman Sachs & Co. LLC or its affiliates, in aggregate amounts equal to $295 million, €62 million ($73 million) and £53 million ($73 million) (the “Initial Notes”). The Notes Purchase Agreement included an option to issue, and a commitment on the part of the purchasers to subscribe for, further notes in one or several issuances on or prior to March 31, 2022 in an aggregate amount of up to $100 million (the “Additional Notes” and, together with the Initial Notes, the “Senior Secured Notes”). The Additional Notes were issued for the full $100 million on March 9, 2022. The Senior Secured Notes mature on March 31, 2027 and bear interest at a fixed rate equal to a cash margin of 2.0192% per annum for the Initial Notes or 2.125% per annum for any Additional Notes, plus a payment-in-kind (capitalized) margin of 6.1572% per annum for the Initial Notes or 6.375% per annum for any Additional Notes. The Senior Secured Notes issued pursuant to the Notes Purchase Agreement may be redeemed and prepaid for cash, in whole or in part, at any time in accordance with the terms thereof, subject to payment of redemption fees. The Senior Secured Notes are guaranteed and secured on substantially the same basis as our Revolving Credit Facility. The Company incurred transaction costs of $13 million ($12 million for the fiscal year ended January 2, 2022, plus the additional $1 million incurred for the fiscal year ended January 1, 2023) related to the Senior Secured Notes. During the fiscal years ended January 1, 2023 and January 2, 2022, the Company incurred interest expense of $47 million and $30 million, respectively, related to the Senior Secured Notes. On November 15, 2021, Soho House Bond Limited entered into the First Amended and Restated Note Purchase Agreement (the "First Note Agreement"). The First Note Amendment amended the Notes Purchase Agreement to, among other things, transition reporting from accounting principles generally accepted in the United Kingdom to US GAAP.

 

In December 2019, the Company entered into a credit facility with Compagnie de Phalsbourg LLC. As of January 1, 2023, the Company had drawn a total of €6 million ($6 million) under this facility. The facility matures in January 2025 and carries an interest rate of 7%. The Company incurred interest expense of less than $1 million during each of the fiscal years ended January 1, 2023 January 2, 2022, and January 3, 2021.

 

In August 2020, the Company entered into a loan with the government of Greece for a principal amount of €2 million ($2 million). The loan matures in July 2025 and carries an interest rate of 3.1%. The Company incurred interest expense of less than $1 million during each of the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021.

 

On June 1, 2021, certain subsidiaries of the Company entered into a development funding agreement with Dorncroft Limited, the landlord of Soho Farmhouse. The agreement provided a commitment of up to £9 million ($12 million) for certain improvements at the Farmhouse property. Interest on the balance drawn under the agreement accrued at an annual rate of 7.9% per annum and was added to the loan principal balance. The facility expired on July 31, 2022, and the outstanding loan balance converted to a finance lease. The Company incurred interest expense of less than $1 million during each of the fiscal years ended January 1, 2023 and January 2, 2022.

 

The other loans consist of the following:

 

 

 

Currency

 

Maturity date

 

Principal
balance as of
January 1, 2023

 

 

Applicable
interest rate
as of January 1, 2023

 

Greek Street loan

 

£

 

January 2028

 

$

3,457

 

 

 

7.5

%

Compagnie de Phalsbourg credit facility

 

€

 

January 2025

 

 

5,542

 

 

 

7

%

Greek government loan

 

€

 

July 2025

 

 

1,204

 

 

 

3.1

%

 

Property Mortgage Loans

 

In February 2019, the Company refinanced an existing term loan and mezzanine loan associated with a March 2014 corporate acquisition of Soho Beach House Miami with a new term loan and mezzanine loan. The new term loan of $55 million and mezzanine loan of $62 million are secured on the underlying property and operations of Soho Beach House Miami and are due in February 2024. The loans bear interest at 5.34% and 7.25%, respectively. The Company incurred interest expense on these facilities of $8 million, $8 million, and $8 million during the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021, respectively.

 

Related Party Loans

 

In 2017, Soho Works Limited entered into a term loan facility agreement with two individuals who are related parties of the Company. The SWL loan bears interest at 7% and matures at the earliest of: (a) September 29, 2023; (b) the date of disposal of the whole or substantial part of the Soho Works Limited; (c) the date of sale by the shareholders of the entire issued share capital of Soho Works Limited to a third party; (d) the date of the admission of Soho Works Limited to any recognized investment exchange or multi-lateral trading facility; and (e) any later date that the two individuals may determine in their sole discretion. During Fiscal 2022, Soho Works Limited drew an additional £3 million ($3 million) under the facility. The carrying amount of the term loan was £20 million ($25 million) and £16 million ($21 million) as of January 1, 2023 and January 2, 2022, respectively. The Company incurred interest expense on this facility of $3 million, $2 million, and $2 million during the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021, respectively. Following the balance sheet date, on March 3, 2023 this loan was subsequently extended and the maturity date is now September 29, 2024 after having previously been at extended to September 29, 2023 by an amendment entered into on March 11, 2022.

 

In August 2020, the Company entered into a non-interest bearing loan agreement with a noncontrolling interest shareholder of certain of its subsidiaries in Greece for a principal amount of less than €1 million ($1 million). The shareholder loan was initially scheduled to mature in December 2021, however the maturity date was subsequently extended until December 2022. The loan was fully repaid in December 2022. The shareholder loan has an effective interest rate of 4% and is presented within current portion of related party loans on the consolidated balance sheets.

 

Shareholders of the Company provided £19 million unsecured, non-interest bearing loan notes. The loan notes constituted unsecured obligations, and the rights of the noteholders under such loan notes were contractually subordinated to any secured senior indebtedness of the Company. In May 2020, the loan notes were settled in exchange for 2,176,424 A ordinary shares of SHHL. Prior to settlement, the loan notes had an effective interest rate of 10%. The Company recognized effective interest expense of $2 million on these loan notes during the fiscal year ended January 3, 2021.

 

Debt Issuance Costs

 

Property mortgage loans due after more than one year are net of unamortized debt issuance costs of $1 million and $2 million as of January 1, 2023 and January 2, 2022, respectively. Other loans are net of unamortized debt issuance costs of less than $1 million and less than $1 million as of January 1, 2023 and January 2, 2022, respectively. For the revolving credit facility as of January 1, 2023, $1 million of unamortized debt issuance costs have been included within prepaid expenses and other current assets on the consolidated balance sheet, following repayment in full of the outstanding balance of the facility. The Senior Secured Notes are net of unamortized debt issuance costs of $8 million as of January 1, 2023.

 

Future Principal Payments

 

The following table presents future principal payments for the Company’s debt, property mortgage loans, and related party loans as of January 1, 2023:

 

(in thousands)

 

 

 

2023

 

$

25,246

 

2024

 

 

117,677

 

2025

 

 

721

 

2026

 

 

7,499

 

2027

 

 

579,714

 

Thereafter

 

 

11

 

 

 

$

730,868

 

 

Financial Covenants

 

Some of the Company’s debt instruments contain a number of covenants that restrict the Company’s ability to incur debt in excess of calculated amounts, ability to make distributions under certain circumstances and generally require the Company to maintain certain financial metrics, such as leverage and minimum working capital levels. Failure for the Company to comply with the financial covenants contained in the debt instruments could result from, among other things, changes in its statement of operations, the incurrence of additional debt or changes in general economic conditions.

 

If the Company violates the financial covenants contained in the debt instruments, the Company may attempt to negotiate waivers of the violations or amend the terms of the applicable instruments, however, the Company can make no assurance that it would be successful in any such negotiations or that, if successful in obtaining waivers or amendments, such amendments or waivers would be on terms attractive to the Company.

 

As of January 1, 2023, the Company was in compliance with all debt covenants, current on all payments and not otherwise in default under any of the Company’s debt instruments.
v3.22.4
Fair Value Measurements
 12 Months Ended
Jan. 01, 2023
Fair Value Disclosures [Abstract]  
Fair Value Measurements
13.
Fair Value Measurements

 

Recurring and Non-recurring Fair Value Measurements

 

There were no assets or liabilities measured at fair value on a recurring or non-recurring basis as of January 1, 2023 and January 2, 2022.

 

Fair Value of Financial Instruments

 

The Company believes the carrying values of its financial instruments related to current assets and liabilities approximate fair value due to short-term maturities.

 

The Company has estimated the fair value of the debt as of January 1, 2023 and the fair value of the Senior Secured Notes as of January 2, 2022 using a discounted cash flow analysis. The fair value of the property mortgage loans and other non-current debt as of January 2, 2022 is estimated to be equal to the current carrying value of each instrument based on a comparison of each instrument’s contractual terms to current market terms. The Company does not believe that the use of different market inputs would have resulted in a materially different fair value of debt as of January 1, 2023 and January 2, 2022.

 

The following table presents the estimated fair values (all of which are Level 3 fair value measurements) of the Company’s debt instruments with maturity dates in 2023 and thereafter:

 

(in thousands)

 

Carrying Value

 

 

Fair Value

 

January 1, 2023

 

 

 

 

 

 

Senior Secured Notes

 

$

570,712

 

 

$

545,362

 

Property mortgage loans

 

 

116,187

 

 

 

113,066

 

Other non-current debt

 

 

10,197

 

 

 

9,647

 

 

 

$

697,096

 

 

$

668,075

 

 

(in thousands)

 

Carrying Value

 

 

Fair Value

 

January 2, 2022

 

 

 

 

 

 

Senior Secured Notes

 

$

447,719

 

 

$

460,182

 

Property mortgage loans

 

 

115,122

 

 

 

115,122

 

Other non-current debt

 

 

12,260

 

 

 

12,260

 

 

 

$

575,101

 

 

$

587,564

 

 

The carrying values of the Company’s other non-current liabilities and non-current assets approximate their fair values.
v3.22.4
Share-Based Compensation
 12 Months Ended
Jan. 01, 2023
Share-Based Payment Arrangement [Abstract]  
Share-Based Compensation
14.
Share-Based Compensation

 

In August 2020, the Company established the 2020 Equity and Incentive Plan (the “2020 Plan”) under which SHHL Share Appreciation Rights (“SARs”) and SHHL Growth Shares were issued to certain employees. The awards are settled in SHHL ordinary D shares and the Company can grant up to 9,978,143 ordinary D shares of SHHL under the 2020 Plan. In connection with the IPO in July 2021, 25% of the outstanding awards accelerated in accordance with the original plan and all of the outstanding awards were exchanged into awards that will be settled in Class A common stock of MCG. As a result of the exchange, 7,127,246 SHHL SARs were converted into 6,023,369 MCG SARs and 2,850,897 SHHL Growth Shares were converted into 781,731 MCG restricted stock awards. The exchanged awards are subject to the same vesting conditions as the original awards. The Company treated the exchange as a Type I probable-to-probable modification and measured the incremental cost of $5 million. The expense for accelerated awards and the incremental cost associated with vested awards of $13 million was recognized immediately upon the exchange.

 

In December 2021, the Company granted 506,990 RSUs to certain employees that were scheduled to vest over a month. On January 16, 2022, the vesting schedule of the RSUs was updated from one vesting end date of January 17, 2022 to a graded vesting schedule that vests 25% on each of January 24, January 31, February 7, and February 14, 2022, respectively. The Company accounted for the modification as a Type I modification and no incremental compensation cost was incurred related to the modification. As of January 1, 2023 and January 2, 2022, there were 5,290,719 and 5,840,483 SARs outstanding under the 2020 Plan, respectively. As of January 1, 2023 and January 2, 2022, there were 146,574 and 390,865 MCG restricted stock awards outstanding under the 2020 Plan, respectively.

 

In July 2021, the Company established its 2021 Equity and Incentive Plan (the "2021 Plan"). The 2021 Plan allows for grants of nonqualified stock options, SARs, and RSUs, or performance awards. There were 12,107,333 shares initially available for all awards under the 2021 Plan and the shares available will increase annually on the first day of each calendar year, beginning with the calendar year ended December 31, 2022. As of January 1, 2023, there were 7,948,478 shares available for future awards. The Company granted 1,026,551 new RSUs under the 2021 Plan during the fiscal year ended January 1, 2023. In September 2022, in conjunction with the departure of an employee, the Company modified the existing awards to allow continued vesting and issued 365,000 new RSUs under the 2021 Plan to the same former employee. The Company accounted for the modification of existing awards as a Type III modification, and $2 million of incremental compensation expense was recognized and included in the "Type III modification" line item below. As of January 1, 2023 and January 2, 2022, there were 2,998,865 and 2,622,877 RSUs outstanding under the 2021 Plan, respectively.

 

In December 2022, the Company modified the exercise prices for the certain of the outstanding SARs to be $4.00 per share. As a result, the Company accounted for the modification as a Type I modification, resulting in $2.2 million of incremental fair value, of which $1.5 million was recorded immediately.

 

Share-based compensation during the fiscal years ended January 1, 2023, January 2, 2022 and January 3, 2021 was recorded in the consolidated statements of operations within a separate line item as shown in the following table:

 

 

 

For the Fiscal Year Ended

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022

 

 

January 3, 2021

 

SARs

 

$

9,425

 

 

$

15,998

 

 

$

885

 

Restricted stock awards (Growth Shares)

 

 

2,285

 

 

 

5,246

 

 

 

1,733

 

RSUs

 

 

12,595

 

 

 

5,416

 

 

 

—

 

Type III modification

 

 

1,902

 

 

 

—

 

 

 

—

 

Employer-related payroll expense(1)

 

 

1,474

 

 

 

—

 

 

 

—

 

Total share-based compensation expense

 

 

27,681

 

 

 

26,660

 

 

 

2,618

 

Tax benefit for share-based compensation expense

 

 

—

 

 

 

—

 

 

 

—

 

Share-based compensation expense, net of tax

 

$

27,681

 

 

$

26,660

 

 

$

2,618

 
(1)
Relates to employment related taxes, including employer national insurance tax in the UK. These amounts were settled in cash and are not included in additional paid-in capital or as an adjustment to reconcile net loss to net cash used in operating activities in the consolidated statements of cash flows.
 

 

The weighted-average assumptions used in valuing SARs and restricted stock awards (previously zero granted as Growth Shares) granted during each period are set forth in the following table:

 

 

For the Fiscal Year Ended

 

 

January 1, 2023

 

 

January 2, 2022

 

 

January 3, 2021

 

Expected average life(1)

3.92 - 6.30 years

 

 

3.50 years

 

 

3.50 years

 

Expected volatility(2)

 

56

%

 

50 – 55%

 

 

 

45

%

Risk-free interest rate(3)

3.78 - 4.25%

 

 

0.32 – 0.43%

 

 

 

0.25

%

Expected dividend yield(4)

 

0.00

%

 

 

0.00

%

 

 

0.00

%
(1)
The expected life assumption is based on the Company's expectation for the period before exercise.
(2)
The expected volatility assumption is developed using leverage-adjusted historical volatilities for public peer companies for the period equal to the expected life of the awards.
(3)
The risk-free rate is based on the bootstrap adjusted US Treasury Rate Yield Curve Rate as of the valuation date, term matched with expected life of the awards.
(4)
The expected dividend yield is 0.0% since the Company does not expect to pay dividends.

 

The weighted-average grant date fair values for SARs granted during the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021 were zero and $4.43 and $3.46, respectively.

 

The following table shows a summary of all SARs granted under the 2020 Plan:

 

 

Number of Shares

 

 

Weighted Average Exercise Price Per Share(1)

 

 

Weighted Average Remaining Contractual Term

 

 

Aggregate Intrinsic Value

 

Outstanding as of January 3, 2021

 

5,536,998

 

 

$

10.52

 

 

 

9.65

 

 

 

 

Granted

 

1,687,632

 

 

 

11.45

 

 

 

 

 

 

 

Forfeited (pre-IPO conversion)

 

(97,384

)

 

 

10.86

 

 

 

 

 

 

 

Exercised

 

—

 

 

 

—

 

 

 

 

 

 

 

Converted (IPO conversion)

 

(1,103,877

)

 

 

 

 

 

 

 

 

 

Forfeited (post-IPO conversion)

 

(182,886

)

 

 

12.63

 

 

 

 

 

 

 

Outstanding as of January 2, 2022

 

5,840,483

 

 

$

12.72

 

 

 

8.61

 

 

$

1,733,089

 

Exercisable as of January 2, 2022

 

2,808,660

 

 

 

12.72

 

 

 

8.40

 

 

 

864,610

 

Vested and expected to vest as of January 2, 2022

 

5,840,483

 

 

$

12.72

 

 

 

8.61

 

 

$

1,733,089

 

Granted

 

—

 

 

 

—

 

 

 

 

 

 

 

Forfeited (post-IPO conversion)

 

(549,764

)

 

 

12.60

 

 

 

 

 

 

 

Exercised

 

—

 

 

 

—

 

 

 

 

 

 

 

Outstanding as of January 1, 2023

 

5,290,719

 

 

$

7.49

 

 

 

5.66

 

 

$

-

 

Exercisable as of January 1, 2023

 

4,246,017

 

 

 

7.49

 

 

 

5.13

 

 

 

-

 

Vested and expected to vest as of January 1, 2023

 

5,290,719

 

 

$

7.49

 

 

 

5.66

 

 

$

-

 

(1) In December 2022, the Company modified the exercise prices for certain outstanding SAR awards to be $4.00 per share. This contributed to the reduction in the weighted average exercise price per share to $7.49.

 

As of January 1, 2023, total compensation expense not yet recognized related to unvested SARs issued under the 2020 Plan is approximately $4 million, which is expected to be recognized over a weighted average period of 0.80 years.

 

The following table shows a summary of all restricted stock awards (previously granted as Growth Shares) granted under the 2020 Plan:

 

 

Number of Shares

 

 

Weighted Average Grant Date Fair Value

 

Nonvested as of January 3, 2021

 

2,850,897

 

 

$

3.46

 

Vested and not yet released as of January 3, 2021

 

—

 

 

 

 

Outstanding as of January 3, 2021

 

2,850,897

 

 

$

3.46

 

Granted

 

—

 

 

 

—

 

Converted

 

(2,069,166

)

 

 

—

 

Vested

 

(390,866

)

 

 

13.28

 

Forfeited

 

—

 

 

 

—

 

Nonvested as of January 2, 2022

 

390,865

 

 

$

13.28

 

Vested and not yet released as of January 2, 2022

 

390,866

 

 

 

13.28

 

Outstanding as of January 2, 2022

 

781,731

 

 

$

13.28

 

Granted

 

—

 

 

 

—

 

Vested

 

(260,577

)

 

 

11.26

 

Forfeited

 

—

 

 

 

—

 

Nonvested as of January 1, 2023

 

130,288

 

 

$

13.28

 

Vested and not yet released as of January 1, 2023

 

16,286

 

 

 

5.19

 

Outstanding as of January 1, 2023

 

146,574

 

 

$

12.38

 

 

As of January 1, 2023, total compensation expense not yet recognized related to unvested restricted stock awards (Growth Shares) is approximately $1 million, which is expected to be recognized over a weighted average period of 0.65 years.

 

The following table shows a summary of all RSUs granted under the 2021 Plan:

 

 

Number of Shares

 

 

Weighted Average Grant Date Fair Value(1)

 

Nonvested as of January 3, 2021

 

—

 

 

$

—

 

Granted

 

2,622,877

 

 

 

10.98

 

Vested

 

—

 

 

 

—

 

Forfeited

 

—

 

 

 

—

 

Nonvested as of January 2, 2022

 

2,622,877

 

 

$

10.98

 

Vested and not yet released as of January 2, 2022

 

—

 

 

 

—

 

Outstanding as of January 2, 2022

 

2,622,877

 

 

$

10.98

 

Granted

 

1,535,975

 

 

 

4.79

 

Vested

 

(1,975,679

)

 

 

8.11

 

Forfeited

 

—

 

 

 

—

 

Nonvested as of January 1, 2023

 

2,183,173

 

 

$

8.44

 

Vested and not yet released as of January 1, 2023

 

815,692

 

 

 

4.76

 

Outstanding as of January 1, 2023

 

2,998,865

 

 

$

7.44

 
(1)
The amount of share-based compensation for the RSUs is based on the fair value of our Class A common stock at the grant date.

 

As of January 1, 2023, total compensation expense not yet recognized related to unvested RSUs under the 2021 Plan is approximately $15 million, which is expected to be recognized over a weighted average period of 2.37 years.
v3.22.4
Redeemable Preferred Shares
 12 Months Ended
Jan. 01, 2023
Stockholders' Equity Note [Abstract]  
Redeemable Preferred Shares Redeemable Preferred Shares

 

In May 2016, the Company issued 10,000,000, 7% SHHL redeemable preferred shares totaling £10 million ($15 million) to unrelated parties. These shares were redeemable by the holders upon an exit, such as an IPO, or sale of the Company and the cumulative dividends are only paid on redemption. As of January 3, 2021, redemption of the preferred shares was not probable. During the second quarter of Fiscal 2021, the Company concluded that the shares were probable of becoming redeemable and, therefore, accreted the shares to their redemption value. The accretion of $5 million is reflected as a reduction in additional paid-in capital on the consolidated statements of changes in redeemable shares and shareholders’ equity (deficit). In addition, the Company remeasured the SHHL redeemable preferred shares and recognized a foreign currency translation gain of $1 million for the fiscal year ended January 2, 2022, which is reflected within accumulated deficit on the consolidated statements of changes in redeemable shares and shareholders’ equity (deficit). The Company redeemed these preferred shares for cash totaling $20 million in July 2021.

 

On March 31, 2021, the Company issued 12,970,766 senior SHHL convertible preference shares (the “Senior Preference Shares”) in an aggregate liquidation preference of $175 million, or approximately $13.49 per Senior Preference Share (the “Issuance Price”), to certain funds managed, sponsored or advised by Goldman Sachs & Co. LLC or its affiliates (the “Preference Share Investors”). The Company received net proceeds of $162 million and incurred transaction costs of $13 million related to the Senior Preference Shares. The Senior Preference Shares accrue a non-cash dividend of 8% per annum on the investment amount of the Senior Preference Shares plus all previously compounded non-cash dividends. The Senior Preference Shares were initially presented as mezzanine equity due to the existence of certain redemption options. During the fiscal year ended January 2, 2022, the Company recognized non-cash preferred dividends of $4 million as an adjustment to the carrying value of the Senior Preference Shares, with a corresponding reduction in additional paid-in capital on the consolidated statements of changes in redeemable shares and shareholders’ equity (deficit). In addition, the Company recognized a deemed dividend of $51 million in connection with the conversion of the Senior Preference Shares into Class A common stock, because the conversion was effected at a discount to the public offering price. This deemed dividend is reflected as a reduction in additional paid-in capital on the consolidated statements of changes in redeemable preferred shares and shareholders' equity (deficit).

 

On July 19, 2021, all of the outstanding Senior Preference Shares were converted into an aggregate of 15,526,619 shares of Class A common stock of MCG immediately upon the closing of the IPO (as described in Note 1, Nature of the Business).
v3.22.4
SHHL C Ordinary Shares
 12 Months Ended
Jan. 01, 2023
Temporary Equity Disclosure [Abstract]  
SHHL C Ordinary Shares
16.
SHHL C Ordinary Shares

 

On August 23, 2019, the Company issued 4,276,347 SHHL redeemable C ordinary shares to an unrelated third party for a total subscription price of $45 million. On the same date, the new investor purchased 475,150 SHHL A ordinary shares directly from Mr. Nick Jones for $5 million; these shares were immediately converted into an equal number of SHHL redeemable C ordinary shares. On

November 4, 2019, the Company issued an additional 2,181,507 shares to the same investor for $20 million, resulting in a total of 6,933,004 SHHL redeemable C ordinary shares issued and outstanding as of December 29, 2019. The Company received net proceeds of $63 million and incurred $5 million of share issuance costs in connection with these transactions.

 

On May 19, 2020, the Company issued an additional 9,502,993 SHHL redeemable C ordinary shares to a different unrelated third party for a total subscription price of $100 million, net of discount of $6 million. The Company received net proceeds of $94 million and incurred $1 million of share issuance costs in connection with this issuance. As a result, the Company had 16,435,997 SHHL redeemable C ordinary shares issued and outstanding as of January 3, 2021. The Company recorded the SHHL redeemable C ordinary shares as mezzanine equity as a result of the redemption provision described below.

 

Upon meeting certain conditions, the holders of the SHHL redeemable C ordinary shares described above had the option to redeem all of the shares between October 1, 2023 and March 31, 2024 with respect to the shares issued in August 2019 or between August 23, 2023 and February 23, 2024 with respect to the shares issued in May 2020, provided that the Company had not completed a public listing of its shares prior to the beginning of the respective redemption period. The redemption amount would be determined using a 5% stated rate of return on the holders’ aggregate subscription price, calculated for the period between August 23, 2019 (or May 19, 2020 for the subsequent issuance) and the redemption date. As of January 3, 2021, redemption of the SHHL redeemable C ordinary shares was not probable and, therefore, the Company recorded the shares at their original issuance price and has not accreted the shares to their redemption value.

 

An investor option was provided in conjunction with the SHHL redeemable C ordinary shares issued on May 19, 2020. In March 2021, the investor option was exercised for the full $50 million, net of a discount of $3 million, and the Company issued an additional 4,751,497 SHHL redeemable C ordinary shares. The Company received net proceeds of $47 million and did not incur any material share issuance costs in connection with this issuance. As a result, the Company had 21,187,494 SHHL redeemable C ordinary shares issued and outstanding immediately prior to the IPO. Redemption of these SHHL redeemable C ordinary shares was not probable as of any period preceding the IPO.

 

On December 8, 2020, Mr. Nick Jones sold certain of his SHHL A ordinary shares to an unrelated third party and as a condition of the transaction, the A ordinary shares were converted into 1,710,546 SHHL C ordinary shares. Unlike the previously issued SHHL redeemable C ordinary shares described above, the investor does not have the right to redeem these converted SHHL C ordinary shares. Therefore, 1,710,546 of the total 18,146,543 SHHL C ordinary shares outstanding as of January 3, 2021 were classified as permanent equity instead of mezzanine equity.

 

In March 2021, the Company issued 4,751,497 SHHL redeemable C ordinary shares to an unrelated third party under an existing investor option. The Company received net proceeds of $47 million and did not incur any material share issuance costs. The SHHL redeemable C ordinary shares were classified as mezzanine equity due to the existence of certain redemption options. Immediately prior to the IPO, the Company had 21,187,494 SHHL redeemable C ordinary shares issued and outstanding. Redemption of these SHHL redeemable C ordinary shares was not probable as of any period preceding the IPO. On July 19, 2021, all of the outstanding SHHL C ordinary shares were exchanged into an aggregate of 6,592,023 shares of Class A common stock and 10,871,215 shares of Class B common stock of MCG in connection with the Reorganization Transactions (as described in Note 1, Nature of the Business).

 

On July 19, 2021, all of the outstanding SHHL C ordinary shares were exchanged into an aggregate of 6,592,023 shares of Class A common stock and 10,871,215 shares of Class B common stock of MCG in connection with the Reorganization Transactions (as described in Note 1, Nature of the Business).
v3.22.4
Loss Per Share and Shareholders' Equity (Deficit)
 12 Months Ended
Jan. 01, 2023
Stockholders' Equity Note [Abstract]  
Loss Per Share and Shareholders' Equity (Deficit)
17.
Loss Per Share and Shareholders’ Equity (Deficit)

 

Prior to the IPO, SHHL had five classes of ordinary shares: A ordinary shares, B ordinary shares, C ordinary shares (a portion of which had certain redemption rights), C2 ordinary shares and D ordinary shares.

 

Holders of SHHL A ordinary shares (par value of £1) were entitled to one vote for each A ordinary share held. Each A ordinary shareholder was entitled pari passu to dividend payments or any other distributions.

 

In January 2012, the Company issued 4,469,417 of SHHL B ordinary shares with par value of £0.0001, which had no voting rights. These shares vested annually in equal installments over a period of five years, and all shares became vested on January 12, 2017. SHHL B ordinary shareholders were entitled to income rights in proportion to the SHHL A ordinary shareholders based on the number

of shares held only after £167 million ($228 million, translated using the exchange rate on January 3, 2021) had been returned in aggregate to the holders of SHHL A ordinary shares, the SHHL C ordinary shares and the SHHL C2 ordinary shares.

 

As described in Note 16, SHHL C Ordinary Shares, in August and November 2019, the Company issued 6,933,004 SHHL redeemable C ordinary shares (par value of £1) to the same unrelated third party in two separate transactions. The Company issued an additional 9,502,993 SHHL redeemable C ordinary shares (par value of £1) to a separate unrelated third party in May 2020. The holders of SHHL redeemable C ordinary shares were entitled to one vote for each share held. In addition, so long as certain conditions were met, each of the investors was entitled to appoint one non-executive director and one non-voting observer director to the Company’s board and also had certain veto rights with respect to a sale of the Company prior to August 23, 2024. All SHHL redeemable C ordinary shares were entitled to dividend payments or any other distributions on a pari passu basis with other classes of SHHL ordinary shares. Upon a public listing of the Company’s shares, the SHHL redeemable C ordinary shares would convert into the same class of shares as the SHHL A ordinary shares on a 1:1 basis, subject to certain anti-dilution protection, whereby the holders of the SHHL redeemable C ordinary shares would receive additional shares if the value of the as-converted SHHL redeemable C ordinary shares was less than the investors’ initial subscription price.

 

Separate from the SHHL redeemable C ordinary shares discussed above, in December 2020, the Company converted 1,710,546 SHHL A ordinary shares into 1,710,546 SHHL C ordinary shares which were not redeemable by the Company. These SHHL C ordinary shares did not have any voting or veto rights. The shares were entitled to dividend payments or any other distributions on a pari passu basis with other classes of SHHL ordinary shares. Upon a public listing of the Company’s shares, the SHHL C ordinary shares would convert into the same class of shares as the SHHL A ordinary shares on a 1:1 basis, subject to certain anti-dilution protection, whereby the holders of the SHHL C ordinary shares would receive additional shares if the value of the as-converted SHHL C ordinary shares was less than the investors’ initial purchase price.

 

In December 2019, the Company issued 3,326,048 of non-voting SHHL C2 ordinary shares with par value of £1 to an unrelated third party. The Company incurred $1 million of share issuance costs in connection with this transaction. The SHHL C2 ordinary shares were entitled to dividend payments or any other distributions on a pari passu basis with other classes of SHHL ordinary shares.

 

In August 2020, the Company established the 2020 Plan, under which employees received SHHL SARs and SHHL Growth Shares which would be settled in SHHL D ordinary shares (par value of £0.0001). As of January 3, 2021, there are 2,850,897 SHHL D ordinary shares issued and outstanding. The SHHL D ordinary shares did not have any voting rights. SHHL D ordinary shareholders were entitled to income and distribution rights in proportion to the SHHL A ordinary, B ordinary, C ordinary and C2 ordinary shareholders based on the number of shares held only after $1,800 million had been returned to the holders of all other classes of SHHL ordinary shares.

 

Immediately prior to the closing of the IPO, affiliates of The Yucaipa Companies, LLC, and Messrs. Ron Burkle, Nick Jones, and Richard Caring exchanged their SHHL A ordinary shares, SHHL B ordinary shares, SHHL C ordinary shares and SHHL D ordinary shares for 141,500,385 shares of Class B common stock of MCG having an equivalent value, while the other ordinary shareholders of SHHL exchanged their equity interests for 14,935,193 shares of Class A common stock of MCG having an equivalent value.

 

The table below presents changes in each class of the Company’s redeemable preferred shares, ordinary shares and common stock, as applicable:

 

 

 

 

 

 

 

 

SHHL Ordinary Shares

 

 

 

MCG Common Stock

 

 

SHHL Redeemable Preferred Shares

 

SHHL Redeemable C Ordinary Shares

 

 

 

A
Ordinary
Shares

 

B
Ordinary
Shares

 

C
Ordinary
Shares

 

C2
Ordinary
Shares

 

D
Ordinary
Shares

 

 

 

Class A Common Stock

 

Class B Common Stock

 

As of December 29, 2019

 

10,000,000

 

 

6,933,004

 

 

 

 

166,110,113

 

 

4,469,417

 

 

—

 

 

3,326,048

 

 

—

 

 

 

 

—

 

 

—

 

Conversion of related party loan to SHHL A ordinary shares (Note 12)

 

—

 

 

—

 

 

 

 

2,176,424

 

 

—

 

 

—

 

 

—

 

 

—

 

 

 

 

—

 

 

—

 

Issuance of SHHL redeemable C ordinary shares (Note 16)

 

—

 

 

9,502,993

 

 

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

 

 

—

 

 

—

 

Conversion of SHHL A ordinary shares into SHHL C ordinary shares (Note 16)

 

—

 

 

—

 

 

 

 

(1,710,546

)

 

—

 

 

1,710,546

 

 

—

 

 

—

 

 

 

 

—

 

 

—

 

Issuance of SHHL Growth Shares under the 2020 Plan (Note 14)

 

—

 

 

—

 

 

 

 

—

 

 

—

 

 

—

 

 

—

 

 

2,850,897

 

 

 

 

—

 

 

—

 

As of January 3, 2021

 

10,000,000

 

 

16,435,997

 

 

 

 

166,575,991

 

 

4,469,417

 

 

1,710,546

 

 

3,326,048

 

 

2,850,897

 

 

 

 

—

 

 

—

 

Issuance of senior convertible preference shares (Note 15)

 

12,970,766

 

 

—

 

 

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

 

 

—

 

 

—

 

Issuance of SHHL redeemable C ordinary shares (Note 16)

 

—

 

 

4,751,497

 

 

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

 

 

—

 

 

—

 

SHHL C2 ordinary shares issued in connection with the Cipura Acquisition (Note 3)

 

—

 

 

—

 

 

 

 

—

 

 

—

 

 

—

 

 

644,828

 

 

—

 

 

 

 

—

 

 

—

 

SHHL C2 ordinary shares issued in connection with the Mandolin Acquisition (Note 3)

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

92,647

 

 

—

 

 

—

 

 

—

 

 

—

 

SHHL C2 ordinary shares issued in connection with the purchase of Soho Works North America noncontrolling interests (Note 3)

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

3,984,883

 

 

—

 

 

—

 

 

—

 

 

—

 

SHHL C2 ordinary shares issued in connection with the purchase of Scorpios noncontrolling interests (Note 3)

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

572,410

 

 

—

 

 

—

 

 

—

 

 

—

 

SHHL C2 ordinary shares issued in connection with the LINE and Saguaro Acquisition (Note 3)

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

1,900,599

 

 

—

 

 

—

 

 

—

 

 

—

 

Effect of the Reorganization Transactions (Note 1)

 

—

 

 

(21,187,494

)

 

 

 

(166,575,991

)

 

(4,469,417

)

 

(1,710,546

)

 

(10,521,415

)

 

(2,850,897

)

 

 

 

14,935,193

 

 

141,500,385

 

Issuance of common stock in connection with initial public offering (Note 1)

 

—

 

 

—

 

 

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

 

 

30,567,918

 

 

—

 

Redemption of the May 2016 preferred shares (Note 15)

 

(10,000,000

)

 

—

 

 

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

 

 

—

 

 

—

 

Conversion of senior convertible preference shares into Class A common stock (Note 15)

 

(12,970,766

)

 

—

 

 

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

 

 

15,526,619

 

 

—

 

As of January 2, 2022

 

—

 

 

—

 

 

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

 

 

61,029,730

 

 

141,500,385

 

 

 

 

MCG Common Stock

 

 

 

Class A
Common Stock

 

Class B
Common Stock

 

As of January 2, 2022

 

 

61,029,730

 

 

141,500,385

 

Shares repurchased

 

 

(8,467,120

)

 

—

 

RSUs vested (Note 14)

 

 

1,159,987

 

 

—

 

As of January 1, 2023

 

 

53,722,597

 

 

141,500,385

 

 

Stock Repurchase Program

 

On March 18, 2022, the Company’s board of directors and a relevant sub-committee thereof authorized and approved a stock repurchase program for up to $50 million of the currently outstanding shares of the Company’s Class A common stock. Under the stock repurchase program, the Company is authorized to repurchase from time-to-time shares of its outstanding Class A common stock on the open market or in privately negotiated transactions in the United States. The timing and amount of stock repurchases will depend on a variety of factors, including market conditions as well as corporate and regulatory considerations. The stock repurchase program may be suspended, modified or discontinued at any time, in accordance with relevant and applicable regulatory requirements, and the Company has no obligation to repurchase any amount of its common stock under the program. The Company intends to make all repurchases in accordance with applicable federal securities laws, including Rule of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended. Under the program, the repurchased shares will be returned to the status of authorized, but unissued shares of common stock held in treasury at average cost. During the fiscal year ended January 1, 2023, the Company repurchased a total of 8,467,120 shares of Class A common stock for $50 million including commissions. Because the repurchase plan upper limit of $50 million was met, there will be no further stock repurchased under the above plan and this is now complete.

 

 

Loss Per Share

 

The table below illustrates the reconciliation of the loss and the number of shares used in the calculations of basic and diluted loss per share:

 

 

 

For the Fiscal Year Ended

 

(in thousands except share and per share amounts)

 

January 1, 2023

 

 

January 2, 2022

 

 

January 3, 2021

 

Net loss attributable to Membership Collective Group Inc.

 

$

(220,580

)

 

$

(265,395

)

 

$

(228,461

)

Less: Cumulative SHHL preferred shares undeclared dividends

 

 

—

 

 

 

(4,778

)

 

 

(4,250

)

Less: Incremental accretion of SHHL preferred shares to
redemption value

 

 

—

 

 

 

(1,085

)

 

 

—

 

Add: Foreign currency remeasurement of SHHL preferred shares

 

 

—

 

 

 

666

 

 

 

—

 

Less: Non-cash dividends on the SHHL senior convertible preference shares

 

 

—

 

 

 

(4,335

)

 

 

—

 

Less: Preferred Shares deemed dividend upon conversion

 

 

—

 

 

 

(51,469

)

 

 

—

 

Adjusted net loss attributable to Class A and Class B common stockholders

 

 

(220,580

)

 

 

(326,396

)

 

 

(232,711

)

Weighted average shares outstanding for basic and diluted loss per share for Class A and Class B common stockholders

 

 

199,985,264

 

 

 

173,691,203

 

 

 

141,896,349

 

Basic and diluted loss per share

 

$

(1.10

)

 

$

(1.88

)

 

$

(1.64

)

 

The net loss attributable to the Company in calculating basic and diluted loss per share for all periods presented is adjusted for cumulative undeclared dividends on the May 2016 preferred shares. In addition, the net loss attributable to the Company in calculating basic and diluted loss per share for the fiscal year ended January 2, 2022 is adjusted for non-cash dividends on the Senior Preference Shares and the impact of the deemed dividend to the holders of Senior Preference Shares upon their conversion into MCG Class A common stock.

 

The loss per share calculations for the fiscal years ended January 2, 2022 and January 3, 2021 exclude additional shares that would be issuable to the holders of SHHL redeemable C ordinary shares in the event of a public listing that resulted in the value of the SHHL redeemable C ordinary shares being less than the investor’s initial subscription price, because the impact of including such additional shares would be anti-dilutive. In addition, the loss per share calculations for the periods presented exclude the impact of unvested Growth Shares (which were exchanged into restricted stock awards in connection with the IPO) because the inclusion of such shares in diluted loss per share would be anti-dilutive.
v3.22.4
Commitments and Contingencies
 12 Months Ended
Jan. 01, 2023
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
18.
Commitments and Contingencies

 

Litigation Matters

 

The Company is not a party to any litigation other than litigation in the ordinary course of business. The Company’s management and legal counsel do not expect that the ultimate outcome of any of its currently ongoing legal proceedings, individually or collectively, will have a material adverse effect on the Company’s consolidated financial statements.

 

Commitments and Contingencies

 

In connection with the closure of Houses across the world beginning on March 14, 2020, the Company in its sole discretion issued membership credits to Soho House members to be redeemed for certain Soho House products and services. Membership credits were issued by the Company as a one-time goodwill gesture deemed to be a marketing offer to Soho House members, and were initially set to expire on December 31, 2020. The liability associated with the membership credits was derecognized based on the usage of credits and the cost of the inventory or services to fulfill the Company’s obligation to its Soho House members; and was classified within other current liabilities on the Company’s consolidated balance sheet. In March 2021, the Company decided in its discretion to extend the expiration date of the member credits to September 30, 2021. The Company simultaneously adjusted its obligation based on its best estimate of the cost to be incurred. The redemption rate used to estimate the obligation associated with the membership credits was based on the Company’s cumulative experience to-date. There were no material marketing expenses recognized during the fiscal year ended January 1, 2023. The Company recognized marketing expenses of $8 million and $12 million during the fiscal years ended January 2, 2022 and January 3, 2021, respectively, which are included within other expense in the consolidated statements of

operations. The expense recognized during the fiscal year ended January 2, 2022 is net of $4 million recorded upon expiration of the vast majority of credits on September 30, 2021.

 

On December 7, 2017, 139 Ludlow Acquisition LLC entered into a loan agreement with Natixis Real Estate Capital LLC. The borrower is a joint venture owned in equal thirds by Soho 139 Holdco, LLC (an entity controlled by the Company) and its two partners. Pursuant to the loan agreement, the lender advanced $33.5 million, the bulk of which proceeds were used to extinguish and refinance the borrower’s previous mortgage loan with Centennial Bank. The loan is secured with a first priority mortgage and security interest on the real property known as 139 Ludlow Street, New York (including an assignment of leases and rents and other customary mortgage documents). The loan is generally “non-recourse”, but subject to standard “carve-outs” for which US AcquireCo, Inc. (a wholly-owned subsidiary of the Company) and its joint venture partners (the “Guarantors”) provided a guarantee of recourse obligations, pursuant to which such Guarantors are jointly and severally obligated to pay (without any cap or limit) the amounts of any actual loss, damage, cost, expense, liability, claim or other obligation incurred by the lender.

 

In August 2014, the Company entered into a security arrangement with regards to Raycliff Red LLP’s (a VIE’s) £4 million ($7 million) bank loan to redevelop a property into an overflow location for Shoreditch House hotel rooms in the United Kingdom. In May 2016, the VIE extended the existing loan to £10 million ($15 million) to, inter alia, purchase an adjoining property that was redeveloped as an overflow location for Shoreditch House hotel rooms. In May 2017, the VIE extended the existing loan to £20 million ($26 million). In July 2018, the facility was extended by a further £0.4 million ($0.5 million). The Company has provided security in respect of the loan by granting the lender a charge over its membership interest in the VIE. The security will remain in effect until the VIE’s bank loan is repaid in full to the lender. In October 2019, the VIE entered into a term loan facility agreement with a new lender, the proceeds of which were used to repay the previous bank loan. As of January 1, 2023, the outstanding balance of the VIE’s term loan was £21 million ($26 million). The Company has provided security in respect of the term loan by granting the lender a charge over its membership interest in the VIE. The security will remain in effect until the VIE’s term loan is repaid in full to the lender.

 

On November 18, 2016, an existing mortgage loan over the Soho House Barcelona property was novated by the VIE to Banca March and extended to a total commitment of €18 million ($19 million). This loan was further extended to a total commitment of €39.5 million ($45 million) on March 21, 2019, and a portion of the proceeds was used to redeem an existing €18 million ($20 million) mezzanine facility from Orca Finance and Invest Ltd to Mirador Barcel S.L. The Banca March loan is secured by way of mortgage over Soho House Barcelona.

 

In June 2018, the Company issued a Letter of Guarantee, secured by The Hongkong and Shanghai Banking Corporation Limited, Hong Kong, in place of a cash deposit totaling HKD 40.6 million ($5 million) to the landlord of Soho House Hong Kong in connection with the lease of the property. Subject to certain criteria, the bank guarantee reduces annually to HKD 32.4 million ($4 million) on the first anniversary of the Letter of Guarantee and HKD 24.3 million ($3 million) on the second anniversary. In addition, in June 2018, Soho House (Hong Kong) Limited drew down $6.5 million pursuant to a loan agreement with Bright Success Investment Limited dated July 12, 2017 (as amended June 1, 2018 and March 7, 2019). In September 2021, the Company repaid in full amounts outstanding under the Soho House Hong Kong loan. For additional information, refer to Note 12, Debt.

 

Capital Commitments

 

As of January 1, 2023, capital expenditure commitments contracted for but not yet incurred totaled $1 million and were related primarily to site improvement costs for Soho House West Hollywood, Little Pool House Miami and Soho House Hong Kong. As of January 2, 2022, capital expenditure commitments contracted for but not yet incurred totaled less than $1 million and were related primarily to site improvement costs for Soho House West Hollywood Cecconi's.

 

Business Interruption and Property Insurance

 

In February 2022, there was a fire at Little Beach House Malibu which resulted in full House closure until April 2022. As a result of the fire damage, the Company recorded business interruption insurance proceeds totaling less than $1 million related to the reimbursement of lost profits as a result of the closure. This amount is recorded as business interruption income on the consolidated statement of operations for the fiscal year ended January 1, 2023.

 

In addition, the Company received cash totaling less than $1 million in connection with a property damage insurance claim, which reimburses the replacement cost for repair or replacement of damaged assets. This amount is recorded as insurance proceeds received on the consolidated statement of cash flows for the fiscal year ended January 1, 2023.

 

The Company did not incur any losses during the fiscal years ended January 2, 2022 and January 3, 2021.

v3.22.4
Defined Contribution Plan
 12 Months Ended
Jan. 01, 2023
Retirement Benefits [Abstract]  
Defined Contribution Plan
19.
Defined Contribution Plan

The Company operates a defined contribution pension plan, an occupational plan to which an individual and their employer make contributions. The assets of the plan are held separately from those of the Company in an independently administered fund. The plan charge amounted to $12 million, $9 million, and $11 million in the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021, respectively. There were no outstanding or prepaid contributions at either the beginning or end of the fiscal years presented in these consolidated financial statements.

v3.22.4
Income Taxes
 12 Months Ended
Jan. 01, 2023
Income Tax Disclosure [Abstract]  
Income Taxes
20.
Income Taxes

 

Below are the components of loss before income taxes for the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021 under the following tax jurisdictions:

 

 

For the Fiscal Year Ended

 

(in thousands)

January 1, 2023

 

 

January 2, 2022

 

 

January 3, 2021

 

Domestic⁽¹⁾

$

1,734

 

 

$

(45,312

)

 

$

(137,120

)

Foreign⁽¹⁾

 

(216,383

)

 

 

(222,508

)

 

 

(98,931

)

 

$

(214,649

)

 

$

(267,820

)

 

$

(236,051

)
(1)
Prior to the Reorganization Transactions, Domestic refers to the UK tax jurisdiction and Foreign refers to all non-UK tax jurisdictions. Following the Reorganization Transactions, Domestic refers to the US tax jurisdiction and Foreign refers to all non-US tax jurisdictions.

 

The provision for income taxes is as follows:

 

 

For the Fiscal Year Ended

 

(in thousands)

January 1, 2023

 

 

January 2, 2022

 

 

January 3, 2021

 

Current tax expense

 

 

 

 

 

 

 

 

Domestic⁽¹⁾

$

2,240

 

 

$

—

 

 

$

7

 

Foreign⁽¹⁾

 

2,654

 

 

 

1,167

 

 

 

558

 

Total current

 

4,894

 

 

 

1,167

 

 

 

565

 

Deferred tax expense (benefit)

 

 

 

 

 

 

 

 

Domestic⁽¹⁾

 

690

 

 

 

(891

)

 

 

—

 

Foreign⁽¹⁾

 

(453

)

 

 

618

 

 

 

(1,341

)

Total deferred

 

237

 

 

 

(273

)

 

 

(1,341

)

Total income tax expense (benefit)

$

5,131

 

 

$

894

 

 

$

(776

)

 

 

 

 

 

 

 

 

 

Effective income tax rate

 

(2

%)

 

 

(0

%)

 

 

0

%
(1)
Prior to the Reorganization Transactions, Domestic refers to the UK tax jurisdiction and Foreign refers to all non-UK tax jurisdictions. Following the Reorganization Transactions, Domestic refers to the US tax jurisdiction and Foreign refers to all non-US tax jurisdictions.

 

A reconciliation of the US and UK statutory income tax rate to the consolidated effective income tax rate is as follows:

 

 

For the Fiscal Year Ended

 

 

January 1, 2023

 

 

January 2, 2022

 

 

January 3, 2021

 

Benefit at US (Fiscal 2022 and Fiscal 2021) and UK (Fiscal 2020 statutory income tax rate

 

21

%

 

 

21

%

 

 

19

%

Permanent differences

 

(2

%)

 

 

(3

%)

 

 

0

%

Non deductible expenses

 

0

%

 

 

(3

%)

 

 

0

%

Change in unrecognized tax benefits

 

0

%

 

 

0

%

 

 

0

%

Movement in valuation allowances

 

(9

%)

 

 

(15

%)

 

 

(24

%)

Change in valuation allowance due to remeasurement of deferred taxes

 

0

%

 

 

(7

%)

 

 

0

%

Differences in tax rates in other jurisdictions

 

0

%

 

 

0

%

 

 

1

%

Change in tax rates

 

0

%

 

 

7

%

 

 

1

%

Loss of tax attributes

 

(13

%)

 

 

0

%

 

 

0

%

Other

 

1

%

 

 

0

%

 

 

3

%

Effective income tax rate

 

(2

%)

 

 

(0

%)

 

 

0

%

 

The effective income tax rate for the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021 differs from the US and UK statutory rate, as applicable, of 21%, 21%, and 19%, respectively. The difference for the fiscal years ended January 2, 2022 and January 3, 2021 are primarily due to current period losses in certain jurisdictions that require a valuation allowance. In the UK, non-trading losses of $2 million in 2022 and $29 million in 2023 have been extinguished due to rules which limit existence of losses subsequent to a change of control. This has resulted in a loss of tax attributes in the period.

 

Deferred Income Taxes

 

Deferred tax assets and liabilities consist of the following:

 

 

As of

 

(in thousands)

January 1, 2023

 

 

January 2, 2022

 

Deferred tax assets

 

 

 

 

 

Property and equipment, net

$

26,858

 

 

$

24,591

 

Other short term differences

 

54,497

 

 

 

17,483

 

Lease liability

 

304,717

 

 

 

229,350

 

Interest limitation carryforward

 

66,866

 

 

 

73,422

 

Tax losses

 

110,201

 

 

 

118,890

 

Total gross deferred tax assets

 

563,139

 

 

 

463,736

 

Valuation allowance

 

(216,114

)

 

 

(174,265

)

Total deferred tax assets

$

347,025

 

 

$

289,471

 

Deferred tax liabilities

 

 

 

 

 

Property and equipment, net

$

(23,357

)

 

$

(38,373

)

Intangible assets

 

(13,093

)

 

 

(17,422

)

Right of use asset

 

(310,956

)

 

 

(232,822

)

Other

 

(990

)

 

 

(2,264

)

Total gross deferred tax liabilities

 

(348,396

)

 

 

(290,881

)

Total net deferred tax liabilities⁽¹⁾

$

(1,371

)

 

$

(1,410

)
(1)
For US tax purposes, the LINE and Saguaro Acquisition transaction was considered an asset acquisition. Refer to Note 3, Acquisitions, for further information on this transaction.

 

Total net deferred taxes are classified as follows:

 

 

As of

 

(in thousands)

January 1, 2023

 

 

January 2, 2022

 

Non-current deferred tax assets

$

295

 

 

$

446

 

Non-current deferred tax liabilities

 

(1,666

)

 

 

(1,856

)

 

$

(1,371

)

 

$

(1,410

)

 

As of January 1, 2023, deferred tax assets related to tax losses were $110 million and interest limitation carryforwards were $67 million which can be used to offset future taxable income. This includes $67 million of net operating losses, or "NOLs", and $40 million of interest limitation carryforwards in the US; $19 million tax losses and $27 million interest limitation carryforwards in the UK; and $8 million tax losses in Hong Kong.

 

As of January 1, 2023, deferred tax assets related to NOLs generated in the US of $225 million will not expire. Deferred tax assets related to US federal and state NOL carryforwards of $61 million and $187 million will expire, if not utilized, in 2031 to 2038 and in 2027 to 2038, respectively. Interest limitation carryforwards in the US do not expire. Deferred tax assets related to tax losses and interest limitation carryforwards in the UK of $19 million and $27 million will not expire. Deferred tax assets related to tax losses in Hong Kong of $8 million will not expire.

 

As of January 2, 2022, deferred tax assets related to NOLs generated in the US of $238 million will not expire. Deferred tax assets related to US federal and state NOL carryforwards of $69 million and $185 million will expire, if not utilized, in 2031 to 2038 and in 2027 to 2038, respectively. Interest limitation carryforwards in the US do not expire. Deferred tax assets related to tax losses and interest limitation carryforwards in the UK of $35 million and $50 million will not expire. Deferred tax assets related to tax losses in Hong Kong of $10 million will not expire.

 

Deferred tax assets are reduced by a valuation allowance if, based on the weight of available positive and negative evidence, it is more likely than not that some portion of or all the deferred tax assets will not be realized. The Company has concluded that it is not more likely than not that the majority of the deferred tax assets can be realized and therefore a valuation allowance has been assigned to these deferred tax assets. If the Company is subsequently able to utilize all or a portion of the deferred tax assets for which a valuation allowance has been established, then it may be required to recognize these deferred tax assets through the reduction of the valuation allowance which could result in a material benefit to the results of operations in the period in which the benefit is determined.

 

During the fiscal year ended January 1, 2023, the valuation allowance for deferred tax assets increased by $42 million. This increase mainly relates to incremental valuation allowances recorded against deferred tax assets in the UK, US, and Hong Kong arising in the period. The components of the increase in valuation allowance are $70 million as a result of current year activity, $27 million decrease relating to the write-off of existing deferred tax assets, and $1 million as a result of the foreign exchange translation impact.

 

As of January 1, 2023, the Company had $90 million (January 2, 2022: $104 million; January 3, 2021: $59 million), $102 million (January 2, 2022: $54 million; January 3, 2021: $62 million), $9 million (January 2, 2022: $8 million; January 3, 2021: $6 million), and $15 million (January 2, 2022: $8 million; January 3, 2021: $4 million) in valuation allowances against the net UK, US, Hong Kong, and the rest of the world deferred tax assets, respectively.

 

A portion of the Company's US deferred tax assets relates to net operating losses, the use of which may not be available as a result of limitations under Section 382 of the US tax code. With respect to the US net operating losses, it is not practical to determine if such losses would be utilized based on Management's future projected taxable income.

 

As of January 1, 2023, the Company had no undistributed earnings on which to provide tax. In the event the Company's subsidiaries become profitable, any distributions will not be taxable due to the UK dividends received exemption regime.

 

Impact of Global Intangible Low Taxed Income Provisions (United States)

 

Due to the Reorganization Transactions described in Note 1, Nature of the Business, the Company is now subject to the US Global Intangible Low Taxed Income (GILTI) provisions which require US groups to include in taxable income certain earnings of their foreign controlled corporations. This provision did not impact the Company in the current year since these foreign controlled corporations generated an overall loss which has no impact on US taxable income. We have elected to treat any potential GILTI inclusions as a period cost.

 

Uncertain Tax Positions

 

The Company recognizes tax liabilities when, despite its belief that its tax return positions are supportable, management believes that certain positions may not be fully sustained upon review by tax authorities. Each period the Company assesses uncertain tax positions for recognition, measurement and effective settlement. Benefits from uncertain tax positions are measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement - the more likely than not recognition threshold. Where

the Company has determined that its tax return filing position does not satisfy the more-likely-than-not recognition threshold, the Company has recorded $16.0 million (January 2, 2022: $16 million; January 3, 2021: $11 million) of tax benefits.

 

The ongoing assessments of the more-likely-than-not outcomes of uncertain tax positions require judgment and can increase or decrease the Company's effective tax rate, as well as impact its operating results. The specific timing of when the resolution of each tax position will be reached is uncertain. As of January 1, 2023, the Company believes it is reasonably possible that the uncertain tax benefits recorded as of January 1, 2023 will be reduced by $4 million as a result of expiry of the relevant statute of limitation in the UK.

 

In July 2021, the Company carried out a legal entity restructuring which resulted in the formation of Membership Collective Group Inc., a US domiciled corporation, as the parent entity of the Company. Prior to July 2021, the parent entity of the Company was a UK domiciled entity.

 

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

 

(in thousands)

January 1, 2023

 

 

January 2, 2022

 

 

January 3, 2021

 

Balance at beginning of year

$

15,129

 

 

$

11,293

 

 

$

9,221

 

Additions related to the current year

 

5,359

 

 

 

3,948

 

 

 

1,996

 

Reductions due to expiry of state of limitations

 

(3,014

)

 

 

(3,822

)

 

 

(1,356

)

Change in tax rate

 

—

 

 

 

3,566

 

 

 

1,478

 

Foreign exchange

 

(1,633

)

 

 

144

 

 

 

(46

)

Balance at end of year

$

15,841

 

 

$

15,129

 

 

$

11,293

 

 

During the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021, the Company did not recognize any interest and penalties associated with its unrecognized tax benefits in its consolidated statements of operations. As of January 1, 2023, if recognized, $16 million of its unrecognized tax benefits, including interest and penalties, would have no impact on the Company’s effective tax rate as a full valuation allowance would be applied.

 

In the UK, US and Greece, the earliest tax years that remain subject to examination by the tax authorities are 2019, 2016, and 2017, respectively. To the extent US tax attributes generated in closed years are carried forward into years that are open to examination, they may be subject to adjustment in audit.

 

The Inflation Reduction Act (the “IRA”) was enacted in August 2022, the provisions of which include a minimum tax equal to 15% of the adjusted financial statement income of certain large corporations, as well as a 1% excise tax on certain share buybacks by public corporations that would be imposed on such corporations. While we are analyzing the impact of the IRA, we are currently unable to predict whether other proposed changes will occur and, if so, when they would be effective or the ultimate impact on us or our business. To the extent that such changes have a negative impact on us or our business, these changes may materially and adversely impact our business, financial condition, and results of operations.

 

On December 15, 2022, the European Union (EU) Member States formally adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation and Development (OECD) Pillar Two Framework that was supported by over 130 countries worldwide, including the UK. The EU effective dates are January 1, 2024, and January 1, 2025, for different aspects of the directive.

 

A significant number of other countries are expected to also implement similar legislation, including South Korea which approved legislation on December 23, 2022 with a full effective date of January 1, 2024. The Company is continuing to evaluate the potential impact on future periods of the Pillar Two Framework, pending legislative adoption by additional individual countries, including those within the European Union. The Company will continue to monitor regulatory developments to assess potential impacts to the Company.

v3.22.4
Segments
 12 Months Ended
Jan. 01, 2023
Segment Reporting [Abstract]  
Segments
21.
Segments

 

The Company’s core operations comprise of Houses and restaurants across a number of territories, which are managed on a geographical basis. There is a segment managing director for each of the UK, North America, and Europe and Rest of the World (“RoW”) who is responsible for Houses, hotels and restaurants in that region. Each operating segment manager reports directly to the

Company’s Chief Operating Decision Maker (“CODM”), the Chief Executive Officer, Chief Financial Officer and Chief Operating Officer - Americas combined. In addition to Houses and restaurants, the Company offers other products and services, such as retail, home & beauty products and services, which comprise its Retail operating segment; access to Soho Works collaboration spaces across the UK and North America, which comprise its Soho Works operating segment; and memberships for people who live in cities where physical Houses do not exist, which comprise its Cities Without Houses operating segment. The Retail, Soho Works, and Cities Without Houses operating segments also have segment managers which report directly to the CODM and are managed separately from the Houses and hotels in each region.

 

The Company has identified the following three reportable segments:

•
UK,
•
North America, and
•
Europe and RoW.

 

The manner in which the Company's Chief Operating Decision Maker ("CODM") assesses information for decision-making purposes changed during the fourth quarter of Fiscal 2022. Soho House Design, which was previously a separate reportable segment, is no longer a separate operating segment or reportable segment since the CODM does not review discrete financial information for the business. In addition, Soho Restaurants, which was previously not a separate operating or reportable segment, became a separate operating segment since the CODM reviews discrete financial information for the business. The Company restated segment information for the historical periods presented herein to conform to the current presentation. This change in segment presentation does not affect the Company's consolidated statements of operations, balance sheets or statements of cash flows.

 

The Company analyzed the results of the Retail, Soho Works, Soho Restaurants, and Cities Without Houses operating segments and concluded that they did not warrant separate presentation as reportable segments as they do not provide additional useful information to the readers of the financial statements. Therefore, these segments are included as part of an “All Other” category.

 

Intercompany revenues and costs among the reportable segments are not material and accounted for as if the sales were to third parties because these items are based on negotiated fees between the segments involved. All intercompany transactions and balances are eliminated in consolidation. Intercompany revenues and costs between entities within a reportable segment are eliminated to arrive at segment totals. Segment revenue includes revenue of certain equity method investments, which are considered stand-alone operating segments, which are therefore not included in revenues as part of these consolidated financial statements. Eliminations between segments are separately presented. Corporate results include amounts related to Corporate functions such as administrative costs and professional fees. Income tax expense is managed by Corporate on a consolidated basis and is not allocated to the reportable segments.

 

The Company manages and assesses the performance of the reportable segments by adjusted EBITDA, which is defined as net income (loss) before depreciation and amortization, interest expense, net, provision (benefit) for income taxes, adjusted to take account of the impact of certain non-cash and other items that the Company does not consider in its evaluation of ongoing operating performance. These other items include, but are not limited to, loss (gain) on sale of property and other, net, share of loss (profit) of equity method investments, foreign exchange, pre-opening expenses, non-cash rent, deferred registration fees, net, share of equity method investments adjusted EBITDA, share-based compensation expense and certain other expenses.

 

The following tables present disaggregated revenue for the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021 and the key financial metrics reviewed by the CODM for the Company’s reportable segments:

 

 

 

For the Fiscal Year Ended January 1, 2023

 

(in thousands)

 

North
America

 

 

UK

 

 

Europe
& ROW

 

 

Reportable
Segment
Total

 

 

All
Other

 

 

Total

 

Membership revenues

 

$

139,636

 

 

$

76,603

 

 

$

31,485

 

 

$

247,724

 

 

$

35,955

 

 

$

283,679

 

In-House revenues

 

 

193,749

 

 

 

166,016

 

 

 

87,866

 

 

 

447,631

 

 

 

—

 

 

 

447,631

 

Other revenues

 

 

70,658

 

 

 

65,010

 

 

 

38,408

 

 

 

174,076

 

 

 

112,102

 

 

 

286,178

 

Total segment revenue

 

 

404,043

 

 

 

307,629

 

 

 

157,759

 

 

 

869,431

 

 

 

148,057

 

 

 

1,017,488

 

Elimination of equity accounted revenue

 

 

(14,919

)

 

 

(7,700

)

 

 

(22,655

)

 

 

(45,274

)

 

 

—

 

 

 

(45,274

)

Consolidated revenue

 

$

389,124

 

 

$

299,929

 

 

$

135,104

 

 

$

824,157

 

 

$

148,057

 

 

$

972,214

 

 

 

 

 

For the Fiscal Year Ended January 2, 2022

 

(in thousands)

 

North
America

 

 

UK

 

 

Europe &
ROW

 

 

Reportable
Segment
Total

 

 

All
Other

 

 

Total

 

Membership revenues

 

$

94,746

 

 

$

59,722

 

 

$

22,074

 

 

$

176,542

 

 

$

21,539

 

 

$

198,081

 

In-House revenues

 

 

103,289

 

 

 

88,987

 

 

 

35,567

 

 

 

227,843

 

 

 

—

 

 

 

227,843

 

Other revenues

 

 

42,111

 

 

 

30,878

 

 

 

22,778

 

 

 

95,767

 

 

 

70,885

 

 

 

166,652

 

Total segment revenue

 

 

240,146

 

 

 

179,587

 

 

 

80,419

 

 

 

500,152

 

 

 

92,424

 

 

 

592,576

 

Elimination of equity accounted revenue

 

 

(13,438

)

 

 

(6,088

)

 

 

(12,496

)

 

 

(32,022

)

 

 

—

 

 

 

(32,022

)

Consolidated revenue

 

$

226,708

 

 

$

173,499

 

 

$

67,923

 

 

$

468,130

 

 

$

92,424

 

 

$

560,554

 

 

 

 

For the Fiscal Year Ended January 3, 2021

 

(in thousands)

 

North
America

 

 

UK

 

 

Europe &
RoW

 

 

Reportable
Segment
Total

 

 

All
Other

 

 

Total

 

Membership revenues

 

$

98,478

 

 

$

54,765

 

 

$

22,884

 

 

$

176,127

 

 

$

10,595

 

 

$

186,722

 

In-House revenues

 

 

50,684

 

 

 

53,563

 

 

 

28,904

 

 

 

133,151

 

 

 

—

 

 

 

133,151

 

Other revenues

 

 

23,869

 

 

 

20,918

 

 

 

6,282

 

 

 

51,069

 

 

 

43,981

 

 

 

95,050

 

Total segment revenue

 

 

173,031

 

 

 

129,246

 

 

 

58,070

 

 

 

360,347

 

 

 

54,576

 

 

 

414,923

 

Elimination of equity accounted revenue

 

 

(16,783

)

 

 

(3,140

)

 

 

(10,624

)

 

 

(30,547

)

 

 

—

 

 

 

(30,547

)

Consolidated revenue

 

$

156,248

 

 

$

126,106

 

 

$

47,446

 

 

$

329,800

 

 

$

54,576

 

 

$

384,376

 

 

 

 

 

 

The following tables present the reconciliation of reportable segment adjusted EBITDA to total consolidated segment revenue and the reconciliation of net loss to adjusted EBITDA:

 

 

 

For the Fiscal Year Ended January 1, 2023

 

(in thousands)

 

North
America

 

 

UK

 

 

Europe &
ROW

 

 

Reportable
Segment
Total

 

 

All
Other

 

 

Total

 

Total consolidated segment revenue

 

$

389,124

 

 

$

299,929

 

 

$

135,104

 

 

$

824,157

 

 

$

148,057

 

 

$

972,214

 

Total segment operating expenses

 

 

(318,375

)

 

 

(238,733

)

 

 

(127,702

)

 

 

(684,810

)

 

 

(161,582

)

 

 

(846,392

)

Share of equity method investments adjusted EBITDA

 

 

2,610

 

 

 

1,142

 

 

 

3,825

 

 

 

7,577

 

 

 

—

 

 

 

7,577

 

Reportable segments adjusted EBITDA

 

 

73,359

 

 

 

62,338

 

 

 

11,227

 

 

 

146,924

 

 

 

(13,525

)

 

 

133,399

 

Unallocated corporate overhead

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(43,522

)

Consolidated adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

89,877

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(99,930

)

Interest expense, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(71,499

)

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,131

)

Gain on sale of property and other, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

390

 

Share of income of equity method investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,941

 

Foreign exchange

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(69,600

)

Pre-opening expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(14,081

)

Non-cash rent(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,877

)

Deferred registration fees, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(924

)

Share of equity method investments adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,577

)

Share-based compensation expense(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(22,675

)

Other expenses, net(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(14,694

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(219,780

)
(1)
Includes the effect of a prior-period error correction, as discussed in Note 2, Summary of Significant Accounting Policies – Basis of Presentation.
(2)
Other expenses, net includes share-based compensation and severance expense incurred related to the departure of the former Chief Operating Officer ($4 million) and another former employee ($1 million) of the Company of $5 million for fiscal year ended January 1, 2023. This balance is reported within Share-based compensation expense in the consolidated statement of operations for the fiscal year ended January 1, 2023.

 

 

 

For the Fiscal Year Ended January 2, 2022

 

(in thousands)

 

North
America

 

 

UK

 

 

Europe &
ROW

 

 

Reportable
Segment
Total

 

 

All
Other

 

 

Total

 

Total consolidated segment revenue

 

$

226,708

 

 

$

173,499

 

 

$

67,923

 

 

$

468,130

 

 

$

92,424

 

 

$

560,554

 

Total segment operating expenses

 

 

(183,051

)

 

 

(145,293

)

 

 

(64,686

)

 

 

(393,030

)

 

 

(114,705

)

 

 

(507,735

)

Share of equity method investments adjusted EBITDA

 

 

2,289

 

 

 

760

 

 

 

1,613

 

 

 

4,662

 

 

 

-

 

 

 

4,662

 

Reportable segments adjusted EBITDA

 

 

45,946

 

 

 

28,966

 

 

 

4,850

 

 

 

79,762

 

 

 

(22,281

)

 

 

57,481

 

Unallocated corporate overhead

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(40,741

)

Consolidated adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16,740

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(83,613

)

Interest expense, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(84,382

)

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(894

)

Gain on sale of property and other, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,837

 

Share of loss of equity method investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,249

)

Foreign exchange (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(25,541

)

Pre-opening expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(21,294

)

Non-cash rent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(12,651

)

Deferred registration fees, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,463

)

Share of equity method investments adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,662

)

Share-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(26,660

)

Other expenses, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(25,882

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(268,714

)
(1)
Includes the effect of a prior-period error correction, as discussed in Note 2, Summary of Significant Accounting Policies – Basis of Presentation.

 

 

 

For the Fiscal Year Ended January 3, 2021

 

(in thousands)

 

North
America

 

 

UK

 

 

Europe &
RoW

 

 

Reportable
Segment
Total

 

 

All
Other

 

 

Total

 

Total consolidated segment revenue

 

$

156,248

 

 

$

126,106

 

 

$

47,446

 

 

$

329,800

 

 

$

54,576

 

 

$

384,376

 

Total segment operating expenses

 

 

(131,444

)

 

 

(112,862

)

 

 

(50,677

)

 

 

(294,983

)

 

 

(61,519

)

 

 

(356,502

)

Share of equity method investments adjusted EBITDA

 

 

2,647

 

 

 

132

 

 

 

784

 

 

 

3,563

 

 

 

-

 

 

 

3,563

 

Reportable segments adjusted EBITDA

 

 

27,451

 

 

 

13,376

 

 

 

(2,447

)

 

 

38,380

 

 

 

(6,943

)

 

 

31,437

 

Unallocated corporate overhead

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(31,211

)

Consolidated adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

226

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(69,802

)

Interest expense, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(77,792

)

Income tax benefit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

776

 

Gain on sale of property and other, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

98

 

Share of loss of equity method investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,627

)

Foreign exchange

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,354

 

Pre-opening expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(21,058

)

Non-cash rent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(15,627

)

Deferred registration fees, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,149

)

Share of equity method investments adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,563

)

Share-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,618

)

Other expenses, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(44,493

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(235,275

)

 

 

 

For the Fiscal Year Ended

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022

 

 

January 3, 2021

 

Net loss

 

$

(219,780

)

 

$

(268,714

)

 

$

(235,275

)

Depreciation and amortization

 

 

99,930

 

 

 

83,613

 

 

 

69,802

 

Interest expense, net

 

 

71,499

 

 

 

84,382

 

 

 

77,792

 

Income tax expense (benefit)

 

 

5,131

 

 

 

894

 

 

 

(776

)

EBITDA

 

 

(43,220

)

 

 

(99,825

)

 

 

(88,457

)

Gain on sale of property and other, net

 

 

(390

)

 

 

(6,837

)

 

 

(98

)

Share of (income) loss of equity method investments

 

 

(3,941

)

 

 

2,249

 

 

 

3,627

 

Foreign exchange

 

 

69,600

 

 

 

25,541

 

 

 

(3,354

)

Pre-opening expenses(1)

 

 

14,081

 

 

 

21,294

 

 

 

21,058

 

Non-cash rent(2)

 

 

7,877

 

 

 

12,651

 

 

 

15,627

 

Deferred registration fees, net

 

 

924

 

 

 

4,463

 

 

 

1,149

 

Share of equity method investments adjusted EBITDA

 

 

7,577

 

 

 

4,662

 

 

 

3,563

 

Share-based compensation expense(3)

 

 

22,675

 

 

 

26,660

 

 

 

2,618

 

Other expenses, net(3)(4)

 

 

14,694

 

 

 

25,882

 

 

 

44,493

 

Adjusted EBITDA

 

$

89,877

 

 

$

16,740

 

 

$

226

 
(1)
The entire balance of these costs is related to pre-opening activities for our Houses in each of the periods presented.
(2)
The non-cash rent balance for the fiscal year ended January 1, 2023 includes the effect of a prior-period error correction, as discussed in Note 2, Summary of Significant Accounting Policies – Basis of Presentation.
(3)
Other expenses, net includes share-based compensation and severance expense incurred related to the departure of the former Chief Operating Officer ($4 million) of the Company and former employee ($1 million) of $5 million for fiscal year ended January 1, 2023. This balance is reported within Share-based compensation expense in the consolidated statement of operations for the fiscal year ended January 1, 2023.

 

(4)
Represents other items included in operating expenses, which are outside the normal scope of the Company’s ordinary activities or non-cash, including expenses incurred in respect of membership credits of $1 million and $8 million for the fiscal years ended January 1, 2023 and January 2, 2022, respectively. Other expenses, net also include IPO-related costs of $14 million and corporate financing and restructuring costs of $2 million incurred during the fiscal year ended January 2, 2022. For the fiscal year ended January 3, 2021, other expenses, net include COVID-19 related charges of $5 million, abandoned project costs of $7 million, corporate restructuring costs of $6 million, and the Soho Restaurants guarantee provision of $5 million (refer to Note 4, Consolidated Variable Interest Entities).

 

The following table presents long-lived asset information (which includes property and equipment, net, operating lease right-of-use assets and equity method investments) by geographic area as of January 1, 2023 and January 2, 2022. Asset information by segment is not reported internally or otherwise regularly reviewed by the CODM.

 

 

 

As of

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022

 

Long-lived assets by geography

 

 

 

 

 

 

North America

 

$

901,505

 

 

$

806,617

 

United Kingdom

 

 

509,221

 

 

 

571,716

 

Europe

 

 

297,247

 

 

 

270,657

 

Asia

 

 

46,236

 

 

 

56,583

 

Total long-lived assets

 

$

1,754,209

 

 

$

1,705,573

 

 
v3.22.4
Related Party Transactions
 12 Months Ended
Jan. 01, 2023
Related Party Transactions [Abstract]  
Related Party Transactions
22.
Related Party Transactions

 

In 2017, SWL entered into a term loan facility agreement with two individuals are related parties of the Company. For additional information, refer to Note 12, Debt – Related Party Loans.

 

In June 2019, Soho House Limited made an interest free loan of less than $1 million to Nick Jones. The loan was due on demand and was settled in full on April 15, 2021.

 

The amounts owed by (to) equity method investees due within one year are as follows:

 

 

 

As of

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022

 

Soho House Toronto Partnership

 

$

1,015

 

 

$

(810

)

Raycliff Red LLP

 

 

(4,169

)

 

 

(2,952

)

Mirador Barcel S.L.

 

 

(499

)

 

 

450

 

Little Beach House Barcelona S.L.

 

 

(313

)

 

 

(203

)

Mimea XXI S.L.

 

 

477

 

 

 

429

 

 

 

$

(3,489

)

 

$

(3,086

)

 

Amounts owed by equity method investees due within one year are included in prepaid expenses and other current assets on the consolidated balance sheets. Amounts owed to equity method investees due within one year are included in other current liabilities on the consolidated balance sheets.

 

In 2016, SWL, a consolidated VIE, entered into an agreement to lease a property under construction by the landlord with Store Holding Group Ltd, a wholly-owned subsidiary of the noncontrolling interest holders of SWL. The handover of six floors of the leased property occurred on a floor-by-floor basis upon substantial completion of landlord improvements, resulting in multiple lease commencement dates in 2019. Lease commencement for the remaining four floors occurred during 2020 upon substantial completion of landlord improvements. This lease runs for a term of 19 years until July 25, 2039. The operating lease asset and liability associated with this lease were $85 million and $101 million as of January 1, 2023, respectively, and $97 million and $117 million as of January 2, 2022, respectively. Rent expense associated with this lease totaled $10 million, $11 million, and $9 million during the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021, respectively.

 

The Company is party to a property lease arrangement with The Yucaipa Companies LLC. This lease runs for a term of 20 years until December 31, 2038. The operating lease asset and liability associated with this lease were $17 million and $21 million as of January 1, 2023, respectively, and $11 million and $17 million as of January 2, 2022, respectively. Rent expense associated with this lease totaled $2 million, $3 million, and $3 million for the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021 respectively.

 

Through Soho-Ludlow Tenant LLC, the Company is a party to a property lease agreement dated May 3, 2019 for 137 Ludlow Street, New York with Ludlow 137 Holdings LLC, an affiliate of The Yucaipa Companies LLC. This lease runs for a term of 22 years until April 20, 2041, with options to extend for three additional five-year terms. The operating lease right-of-use asset and liability associated with this lease were $8 million, $15 million, respectively, as of January 1, 2023 and $9 million and $15 million, respectively, as of January 2, 2022. The rent expense associated with this lease was $1 million, $1 million, and $10 million for the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021, respectively.

 

The Company leases the Ludlow property from 139 Ludlow Acquisition LLC, an equity method investee. This is a 25-year lease that commenced May 1, 2016. The operating lease right-of-use asset and liability associated with this lease were $29 million and $33 million, respectively, as of January 1, 2023 and $30 million and $33 million, respectively, as of January 2, 2022. The rent expense associated with this lease was $4 million, $4 million, and $4 million for the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021, respectively.

 

The Company leases the Tel Aviv House from an affiliate of Raycliff Capital, LLC which held a portion of the SHHL redeemable C ordinary shares prior to the IPO and continues to hold Class A common stock of MCG. This lease commenced on June 1, 2021. This lease runs for a term of 19 years until December 15, 2039. The operating lease right-of-use asset and liability associated with this lease were $21 million and $22 million, respectively, as of January 1, 2023 and $23 million and $22 million, respectively, as of January 2, 2022. The rent expense associated with this lease was $3 million and $2 million for the fiscal year ended January 1, 2023 and January 2, 2022, respectively.

 

The Company leases the Little House West Hollywood from GHWHI, LLC, a company controlled by an affiliate of the Company. This lease commenced on October 16, 2021. This lease runs for a term of 25 years (15-year base lease term, including two 5-year renewal options). The operating lease right-of-use asset and liability associated with this lease were $65 million and $69 million,

respectively, as of January 1, 2023. The rent expense associated with this lease was $5 million and less than $1 million for the fiscal years ended January 1, 2023 and January 2, 2022, respectively.

 

The Company leases a property from GHPSI, LLC, an affiliate of the Yucaipa Companies LLC, in order to operate the Le Vallauris restaurant in Palm Springs, California. This lease commenced on February 2, 2022. This lease runs for a term of 15 years until March 16, 2037, with options to extend for two additional five-year terms. The operating lease right-of-use asset and liability associated with this lease were $7 million and $7 million, respectively, as of January 1, 2023. The rent expense associated with this lease was $1 million for the fiscal year ended January 1, 2023.

 

The Company leases a property from GHPSI, LLC in order to operate the Willows Historic Palm Springs Inn in Palm Springs, California. GHPSI’s ultimate parent entity is GHREP, LLC, an affiliate of The Yucaipa Companies LLC. This lease commenced on September 15, 2022. This lease runs for a term of 15 years until September 14, 2037, with options to extend for two additional five-year terms. The operating lease right-of-use asset and liability associated with this lease were $14 million and $14 million, respectively, as of January 1, 2023. The rent expense associated with this lease was $1 million for the fiscal year ended January 1, 2023.

 

The Company leases the Soho House Stockholm property from Majorsbolaget AB, a company controlled by an affiliate of the Company. This lease commenced on December 8, 2022. This lease runs for a term of 15 years. The operating lease right-of-use asset and liability associated with this lease were $28 million and $28 million, respectively, as of January 1, 2023. The rent expense associated with this lease was less than $1 million for the fiscal year ended January 1, 2023.

 

Ned-Soho House, LLP received management fees, development fees and cost reimbursements from The Ned totaling $4 million, $1 million, and $2 million during the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021, respectively.

 

The Company received management fees from affiliates of the Company related to the operations of The Ned New York totaling $1 million in each case during the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021, respectively. The Company received management fees from affiliates of the Company related to the operations of The Ned Doha totaling less than $1 million during the fiscal year ended January 1, 2023.

 

The Company received management fees under our hotel management contract for the operation of the LINE and Saguaro hotels from an affiliate of Yucaipa Companies LLC. These fees amounted to $8 million and $2 million during the fiscal years ended January 1, 2023 and January 2, 2022, respectively.

 

Fees from the provision of Soho House Design services were received from affiliates of the Company totaled $15 million and $1 million for the fiscal year ended January 1, 2023 and January 2, 2022, respectively. Costs from the provision of Soho House Design services were received from affiliates of the Company totaled $4 million and less than $1 million for the fiscal year ended January 1, 2023 and January 2, 2022, respectively.

 

In return for arranging, and providing financial and transaction advisory services in connection with, the issuance of the Senior Secured Notes and the Senior Preference Shares as described in Note 12, Debt, and Note 15, SHHL Redeemable Preferred Shares, respectively, an affiliate of Yucaipa Companies LLC received a fee in an aggregate amount of $10 million pursuant to a fee letter arrangement with the Company dated March 23, 2021.

 

In return for its role as sponsor in connection with our IPO, an affiliate of Yucaipa Companies LLC received a fee of $9 million pursuant to a fee letter arrangement with the Company dated July 19, 2021. The fee, which has been paid in full, has been recognized as a reduction of additional paid in capital.
v3.22.4
Subsequent Events
 12 Months Ended
Jan. 01, 2023
Subsequent Events [Abstract]  
Subsequent Events
23.
Subsequent Events

 

Shares Issued

During January 2023, the Company issued a total of 317,013 shares of Class A common stock as a result of RSU awards vesting.

 

Grant of Share Appreciation Rights

During January and February 2023, the Company granted to certain senior employees 3,113,109 SARs vesting over the next three years with an exercise price of $5.00.

 

Soho Works Limited Loan
In 2017, Soho Works Limited ("SWL") entered into a term loan facility agreement for a £40 million term loan facility. The SWL loan bears interest at 7% and originally matured on September 29, 2022. On March 3, 2023 this loan was extended and the maturity date is now September 29, 2024 after having previously been extended to September 29, 2023 by an amendment entered into on March 11, 2022.

 

 

 
v3.22.4
Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Jan. 01, 2023
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

 

The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The preparation of the financial statements in conformity with US GAAP requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the periods presented. The Company's significant estimates relate to the valuation of financial instruments, equity method investments, the measurement of goodwill and intangible assets, contingent liabilities, income taxes, leases, long-lived assets and the expected breakage of house introduction credits. Although the estimates have been prepared using management's best judgment and management believes that the estimates used are reasonable, actual results could differ from those estimates and such differences could be material.

 

We operate on a fiscal year calendar consisting of a 52-or 53-week period ending on the last Sunday in December or the first Sunday in January of the next calendar year. In a 52-week fiscal year, each quarter contains 13 weeks of operations; in a 53-week fiscal year, each of the first, second and third quarters includes 13 weeks of operations and the fourth quarter includes 14 weeks of operations.

 

Our 2022 fiscal year ended on January 1, 2023 ("Fiscal 2022"), our 2021 fiscal year ended on January 2, 2022 ("Fiscal 2021") and our 2020 fiscal year ended on January 3, 2021 ("Fiscal 2020"). Fiscal 2022 was a 52-week year, Fiscal 2021 was a 52-week year and Fiscal 2020 was a 53-week year.

 

The consolidated statement of operations for Fiscal 2022 and the consolidated balance sheet as of Fiscal 2022 include the correction of an error related to the Company’s consolidated financial statements as of and for Fiscal 2021 and Fiscal 2020. The error, which was identified in fiscal 2022, relates to the correction of the estimation of the historical operating lease liabilities which resulted in the overstatement of historical operating lease liability and assets by $10 million and $5 million, respectively, as of Fiscal 2021; and $18 million and $13 million, respectively, as of Fiscal 2020. The correction of this error is presented within operating lease assets and operating lease liabilities in the consolidated balance sheet as of Fiscal 2022 amounting to $5 million and $10 million, respectively. The error also resulted in the overstatement of operating lease expenses, with a cumulative impact of $5 million for Fiscal 2021 and $5 million for Fiscal 2020. The correction of this cumulative error is presented within In-House operating expenses in the consolidated statement of operations for Fiscal 2022.

 

Certain prior period amounts have been reclassified to conform to the current period presentation with no impact on previously reported net loss or cash flows, and no material impact on financial position including in Note 21 Segments due to changes in assessed information for decision making purposes.
Going Concern

Going Concern

 

The accompanying consolidated financial statements of the Company have been prepared assuming the Company will continue as a going concern. The going concern basis of presentation assumes that we will continue in operation for at least a period of 12 months after the date these financial statements are issued, and contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

 

We have experienced net losses and significant cash outflows from cash used in operating activities over the past years as we develop our Houses. During the fiscal year ended January 1, 2023, the Company incurred a consolidated net loss of $220 million. During the fiscal year ended January 1, 2023, the Company had positive cash flow from operations of $15 million. As of January 1, 2023, the Company had an accumulated deficit balance of $1,242 million. As of January 1, 2023, the Company had a cash and cash equivalents balance of $182 million, and a restricted cash balance of $8 million.

 

In assessing the going concern basis of preparation of the consolidated financial statements for the fiscal year ended January 1, 2023, we have taken into consideration detailed cash flow forecasts for the Company, the Company’s forecast compliance with bank covenants, and the timing of debt commitments within 12 months of the approval of these financial statements, and the continued availability of committed and accessible working capital to the Company.

 

We have considered the current global economic and political uncertainties, specifically including inflationary pressures on consumables purchased and wages, as well as any further possible impacts from the COVID-19 pandemic and the Company has factored these in when it undertook an assessment of the cash flow forecasts covering a period of at least 12 months from the date these financial statements are issued. Cash flow forecasts have been prepared based on a range of scenarios including, but not limited to, no further debt or equity funding, repayment of existing short-term debt, macro-economic dynamics, possible temporary closures of our properties from any further impact of the COVID-19 pandemic (which impacts the Company’s ability to keep open Houses and maintain a level of operations consistent with pre COVID-19 times), cost reductions, both limited and extensive, and a combination of these different scenarios.

 

We believe that the completed working capital events, our projected cash flows and the actions available to management to further control expenditure (particularly in respect of timing of capital works and labor costs), as necessary, provide the Company with sufficient working capital (including cash and cash equivalents) to mitigate the impact of inflationary pressures and consumer confidences, subject to the following key factors:

•
the level of in-House sales activity (primarily sales of food and beverage) that, even after opening, may be subject to operational constraints connected with a re-emergence of any restrictions;
•
the continued high level of membership retention and renewals, together with members continuing their current spending patterns; and
•
the implementation, and timely deployment, of cost containment and reductions measures that are aligned with the anticipated levels of capacity.

 

Furthermore, available cash as a result of completed financing events, includes the exercising of an option on March 9, 2022 for issued additional notes under the existing senior secured notes for $100 million and available additional liquidity, and access to an undrawn revolving credit facility of £71 million ($86 million) (see Note 12, Debt, for additional information).

 

This, together with the Company’s wider sufficient financial resources, an established business model, access to capital and the measures that have been put in place to control costs, mean that we believe that the Company is able to continue in operational existence, meet its liabilities as they fall due, operate within its existing facilities, and meet all of its covenant requirements for a period of at least 12 months from the date these financial statements are issued.

 

Based on the above, the consolidated financial statements have been presented on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, we continue to adopt the going concern basis in preparing the consolidated financial statements for the fiscal year ended January 1, 2023.
Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income

 

The entire balance of accumulated other comprehensive income is related to the cumulative translation adjustment in each of the periods presented. The changes in the balance of accumulated other comprehensive income are attributable solely to the net change in the cumulative translation adjustment in each of the periods presented, and include the error correction described above during Fiscal 2021.
Principles of Consolidation

Principles of Consolidation

 

The consolidated financial statements of the Company include the accounts of Membership Collective Group Inc. and its subsidiaries, as well as certain consolidated variable interest entities (“VIEs”) for which the Company is considered the primary beneficiary (see Note 4, Consolidated Variable Interest Entities, for additional information). Other parties’ interests in entities that the Company consolidates are reported as noncontrolling interests within shareholders’ (deficit) equity. Net loss and each component of other comprehensive (loss) are attributed to the owners of the Company and to any noncontrolling interests. All intra-company assets and liabilities, equity, income, expenses and cash flows are eliminated in full on consolidation.
Equity Method Investments

Equity Method Investments

 

The Company’s equity method investments consist of investments in which the Company does not control the investee but can exert significant influence over the financial and operating policies, as well as joint ventures where there is joint control (and in both cases if the investee is a VIE, where the Company is not the primary beneficiary of the VIE). The ability to exert significant influence is generally considered to exist when the Company owns between 20% and 50% of voting equity securities of the investee, in the case of corporate entities.

 

When the Company sells an interest in a subsidiary which then becomes an equity method investment, the retained interest is remeasured at fair value.

 

Investments are initially recognized at cost when purchased for cash, or at the fair value of shares received when acquired. The investments are subsequently carried at cost adjusted for the Company’s share of net income or loss and other changes in comprehensive income (loss) of the joint venture, less any dividends or distributions received by the Company. The investments are presented as equity method investments in the consolidated balance sheets. Income or loss from these investments is recorded as a separate line item in the consolidated statements of operations. Intercompany profits or losses associated with the Company’s equity method investments are eliminated until realized by the investee in transactions with third parties. Where distributions from equity-method investees and the Company’s share of investee losses are in excess of the carrying amount of the investment (including, where applicable, advances made by the Company to the investee), after the Company’s equity-method investment balance is reduced to zero, additional losses are recognized to the extent that the Company has guaranteed the investee’s obligations or has otherwise incurred legal or constructive obligations or has made payments on behalf of the investee.

 

The Company considers whether its equity method investments are impaired when events or circumstances suggest that the carrying amount may not be recoverable. An impairment charge is recognized in the consolidated statements of operations for a decline in

value that is determined to be other-than-temporary. Once a determination is made that an other-than-temporary impairment exists, the investment is written down to its fair value. There were no other-than-temporary impairments recorded during the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021.
Variable Interest Entities

Variable Interest Entities

 

The Company analyzes its variable interests, including loans, guarantees, and equity investments, to determine if the entity in which the Company has a variable interest is a VIE. For those entities determined to be VIEs a quantitative and qualitative analysis is performed to determine if the Company will be deemed the primary beneficiary. The primary beneficiary of a VIE is defined as the variable interest holder that has a controlling financial interest in the VIE. A controlling financial interest is defined as one that has i) the power to direct the activities of the VIE that most significantly impact its economic performance and ii) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE.

 

In evaluating whether the Company has the power to direct the activities of a VIE that most significantly impact its economic performance, the Company bases its qualitative analysis on its review of the design of the entity, its organizational structure including decision-making ability and the relevant development, ownership interest, operating, management and financial agreements. This evaluation requires consideration of all facts and circumstances relevant to decision-making that affect the entity’s future performance and the exercise of professional judgment in deciding which decision-making rights are most important.

 

The Company consolidates those entities in which it is determined to be the primary beneficiary. If the Company is not determined to be the primary beneficiary but can exercise significant influence over these entities, these investments are accounted for under the equity method of accounting.
Concentration of Credit Risk

Concentration of Credit Risk

 

Credit risk is the risk of loss from amounts owed by customers and financial counterparties. Credit risk can occur at multiple levels; as a result of broad economic conditions, challenges within specific sectors of the economy, or from issues affecting individual companies. Financial instruments that potentially subject the Company to credit risk consist of cash, cash equivalents, restricted cash, accounts receivable, and other receivables.

 

The Company maintains cash, cash equivalents, and restricted cash with major financial institutions. The Company’s cash, cash equivalents, and restricted cash consist of bank deposits held with banks that, at times, exceed federally insured limits. The Company limits its credit risk by dealing with counterparties that are considered to be of high credit quality.
Cash and Cash Equivalents

Cash and Cash Equivalents

 

Cash and cash equivalents include cash on hand, demand deposits, and all highly liquid investments with original maturities, when purchased, of three months or less.
Restricted Cash

Restricted Cash

 

Restricted cash represents cash that is not available to the Company due to restrictions related to its use. As of January 1, 2023 and January 2, 2022, restricted cash related primarily to balances with the Company’s payments service provider, financing arrangements for the Soho Beach House in Miami, and security deposits.

 

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown on the consolidated statements of cash flows.

 

 

 

As of

 

(in thousands)

January 1, 2023

 

 

January 2, 2022

 

 

January 3, 2021

 

Cash and cash equivalents

$

 

182,115

 

 

$

 

212,833

 

 

$

 

52,887

 

Restricted cash

 

 

7,928

 

 

 

 

7,829

 

 

 

 

7,083

 

Total cash, cash equivalents, and restricted cash shown on the consolidated statement of cash flows

$

 

190,043

 

 

$

 

220,662

 

 

$

 

59,970

 

 
Accounts Receivable and Allowance for Doubtful Accounts

Accounts Receivable and Allowance for Doubtful Accounts

 

Accounts receivable include amounts due from customers in connection with the Company’s in-house building service whereby the Company extends credit, generally without requiring collateral, based on its evaluation of the customer’s financial condition. Accounts receivable also include amounts due from customers, guests and members relating to services rendered. Any allowance for doubtful accounts includes management’s estimate of the amounts expected to be uncollectible on specific accounts receivable, taking into account the creditworthiness of the counterparty, the aging of the outstanding balance, and historical recoverability patterns. Allowance for doubtful accounts was $4 million as of January 1, 2023 and $3 million as of January 2, 2022.

 

While the Company has a concentration of credit risk in relation to certain customers, this risk is mitigated by payments on account and credit checks on customers. Typically, accounts receivable have terms ranging from 0-60 days and do not bear interest. As of January 1, 2023, there were no customers which individually accounted for more than 10% of trade receivables; there were no customers which individually accounted for more than 10% of revenue during the fiscal year then ended. As of January 2, 2022, there were two customers which individually accounted for more than 10% of trade receivables (16% and 10%); there were no customers which individually accounted for more than 10% of revenue during the fiscal year then ended.

Inventories

Inventories

 

Inventories are valued at the lower of cost or net realizable value and cost is determined using a weighted-average cost method. Inventories consist of raw materials, service stock and supplies (primarily food and beverage), and finished goods which are externally sourced. Raw materials and service stock and supplies totaled $19 million and $8 million as of January 1, 2023 and January 2, 2022, respectively. Finished goods totaled $39 million and $22 million as of January 1, 2023 and January 2, 2022, respectively. The Company records a reserve for obsolete or unusable inventory, where applicable. The reserve was less than $1 million and zero as of January 1, 2023 and January 2, 2022, respectively.

Property and Equipment

Property and Equipment

 

Property and equipment relate to buildings for owned Houses, leasehold improvements for leased Houses, fixtures and fittings and other office equipment. Property and equipment are recorded at cost, or if acquired in a business combination, at fair value as of the acquisition date, less accumulated depreciation. Costs of improvements that extend the economic life or improve service potential are capitalized. Capitalized costs are depreciated over the assets’ estimated useful lives. Costs for normal repairs and maintenance are expensed as incurred. The carrying amounts of assets sold or retired and the related accumulated depreciation are eliminated in the year of disposal, with resulting gains or losses included in gain (loss) on sale of property and other, net in the consolidated statements of operations.

 

Depreciation is recorded using the straight-line method over the assets’ estimated useful lives, which are generally as follows:

 

Buildings

50-100 years

Leasehold improvements

Lesser of useful life or remaining lease term

Fixtures and fittings

2-5 years

Office equipment and other

2-4 years

Finance lease property

Reasonably assured lease term

 

Depreciation expense is included in depreciation and amortization in the accompanying consolidated statements of operations.

 

Assets under construction relate mainly to the build out of future Houses, are stated at cost and depreciation begins when the asset is placed in service. For property under construction, the Company capitalizes all specifically identifiable costs related to development activities, as well as interest costs incurred while activities necessary to get the property ready for its intended use are in progress. During the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021, there was no capitalized interest.

 

Impairment of Property and Equipment

 

The Company reviews its property and equipment for impairment indicators at each reporting date. Impairment losses are required to be recorded for long-lived assets to be held and used by the Company when indicators of impairment are present and the carrying value of the assets exceeds the future undiscounted cash flows estimated to be generated by those assets. When an asset group to be held and used by the Company is determined to be impaired, the related carrying amount of the asset is adjusted to its estimated fair value. Recoverability of long-lived assets is measured by comparison of (i) the carrying amount of assets to (ii) the future

undiscounted cash flows that the assets are expected to generate over their remaining lives. If the carrying amount of the assets is not recoverable, the amount of impairment, if any, is measured as the difference between the carrying value and the fair value of the impaired assets. If the Company determines that the remaining useful life is shorter than originally estimated, it amortizes the remaining carrying value over the new shorter useful life. No impairment losses were recorded during the fiscal year ended January 1, 2023 and January 2, 2022. Impairment losses were less than $1 million during the fiscal year ended January 3, 2021.

Business Combinations

Business Combinations

 

The Company accounts for its business combinations using the acquisition method of accounting. The consideration transferred in a business combination is measured as the aggregate of the acquisition date fair values of the assets transferred by the Company to the sellers and equity instruments issued. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable tangible and intangible assets acquired and liabilities assumed are measured separately at their fair values as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total consideration transferred, fair value of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree is recorded as goodwill. If the consideration transferred is less than the fair value of the net assets of the acquiree, the difference is recognized directly in the consolidated statements of operations as a gain. During the measurement period, which can be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed. See Note 3, Acquisitions, for additional information.

 

Transactions between entities under common control are excluded from the scope of the business combinations guidance. The Company accounts for transfers of assets, net assets or equity interests between entities under common control prospectively at the parent's carrying values.
Intangible Assets with Finite Useful Lives

Intangible Assets with Finite Useful Lives

 

The Company has certain finite lived intangible assets that were initially recorded at their fair values. These intangible assets consist primarily of brand names, membership lists, hotel management agreements, internally developed software and trademarks. Intangible assets with finite useful lives, which have a weighted-average life of 17 years, are amortized using the straight-line method over their estimated useful lives.

 

All finite lived intangible assets are reviewed for impairment when circumstances indicate that their carrying amounts may not be recoverable; for example, when there are material adverse changes in projected revenues or expenses, significant underperformance relative to historical or projected operating results, or significant negative industry or economic trends. The Company evaluates recoverability of a finite lived intangible asset by comparing its carrying value to its estimated fair value, which is determined through the income approach, the market approach or another appropriate method based on the circumstances. If a finite lived intangible asset’s estimated current fair value is less than its respective carrying value, the excess of the carrying value over the estimated fair value is recognized as an impairment loss in the consolidated statements of operations.

 

During Fiscal 2020, House closures and uncertainties surrounding re-opening procedures associated with the COVID-19 pandemic constituted a triggering event for testing whether intangible assets were impaired. The Company performed a quantitative assessment as of the first quarter of Fiscal 2020 and concluded there was no impairment. No impairment losses were recorded during the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021.

 

Costs incurred during the application development stage for internal-use software are capitalized. Capitalized website development costs and internal-use software costs are amortized using the straight-line amortization method over the estimated useful life of the applicable software.
Goodwill

Goodwill

 

In January 2012, affiliates of the Yucaipa Companies, LLC acquired 58.9% of the outstanding equity interests of the entity which subsequently became Soho House Holdings Limited through a series of transactions. The Acquisition was accounted for using the acquisition method of accounting, which resulted in a new basis for the assets acquired and liabilities assumed and the recognition of goodwill. In addition, the Company recognized goodwill as a result of the acquisition of a business in Mykonos, Greece during the fiscal year ended December 29, 2019, as well as the acquisition of a controlling interest in Soho House—Cipura (Miami), LLC ("Cipura") and the companies that together operate existing and future "The LINE" and "Saguaro" hotels in the United States during the fiscal year ended January 2, 2022. See Note 3, Acquisitions, for additional information.

 

Goodwill is not amortized, but instead is tested for impairment annually. The Company assesses goodwill for potential impairment on the first day of the fourth fiscal quarter, or during the year if an event or other circumstances indicate that the Company may not be able to recover the carrying amount of the net assets of the reporting unit. A reporting unit is an operating segment or one level below the operating segment level, which is referred to as a component. The Company identifies its reporting units by assessing whether components (i) have discrete financial information available; (ii) engage in business activities; and (iii) have a segment manager who regularly reviews the component’s operating results. Net assets and goodwill of acquired businesses are allocated to the reporting unit(s) associated with the acquired business based on the anticipated organizational structure of the combined entities. If two or more components are deemed economically similar, those components are aggregated into one reporting unit when performing the annual goodwill impairment review. As of January 1, 2023 and January 2, 2022, the Company had seven reporting units with a goodwill balance.

 

In evaluating goodwill for impairment, the Company may first assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50%) that the fair value of a reporting unit is less than its carrying amount. Qualitative factors that the Company considers include, for example, macroeconomic and industry conditions, overall financial performance, and other relevant entity-specific events. If the Company bypasses the qualitative assessment or concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then a quantitative goodwill impairment test is performed to identify potential goodwill impairment and measure the amount of goodwill impairment that will be recognized, if any.

 

When performing the quantitative goodwill impairment test, the Company compares the estimated fair value of each of its reporting units with their respective carrying values. If the estimated fair value of a reporting unit exceeds its carrying amount, goodwill is not considered impaired. If, however, the estimated fair value of a reporting unit is less than its carrying amount, the excess of the carrying value of the reporting unit over its fair value is recognized as a goodwill impairment. When performing a quantitative goodwill impairment assessment, the estimated fair value of a reporting unit is calculated using the income approach and the market approach. For the income approach, the Company uses internally developed discounted cash flow models that include the following assumptions, among others: projections of revenues, expenses, and related cash flows based on assumed long-term growth rates and demand trends; expected net working capital and capital expenditure requirements; and estimated discount rates. For the market approach, the Company relies upon valuation multiples derived from stock prices and enterprise values of publicly-traded companies that are comparable to the reporting units being evaluated.

 

While the Company tests its goodwill for impairment at least annually, it will test its goodwill for impairment if an event occurs or circumstances change which are considered to be a triggering event that would more likely than not reduce a reporting unit’s fair value below its carrying amount. In Fiscal 2021, the Company performed a quantitative impairment assessment for two reporting units and a qualitative assessment for the remaining five reporting units; based on these assessments, the Company determined that no goodwill impairment existed. In Fiscal 2022, the Company performed a quantitative impairment assessment for seven reporting units; based on these assessments, the Company determined that no goodwill impairment existed.
Leases

Leases

 

The Company has entered into lease agreements for its Houses, hotels, restaurants, spas and other properties. The Company accounts for its leases under ASU 2016-02, Leases (Topic 842).

 

The Company determines the initial classification and measurement of its right-of-use assets and lease liabilities at the lease commencement date and thereafter, if the leases are modified. The lease term includes any renewal options and termination options that the Company is reasonably assured to exercise. The present value of lease payments is determined by using the interest rate implicit in the lease, if that rate is readily determinable; otherwise, the Company uses its incremental borrowing rate. The incremental borrowing rate is determined by using a portfolio approach based on the rate of interest that the Company would pay to borrow on a collateralized basis an amount equal to the lease payments for a similar term and in a similar economic environment.

 

Rent expense for operating leases is recognized on a straight-line basis over the reasonably assured lease term based on the total lease payments and is included in other in-house operating expenses and other operating expenses in the consolidated statements of operations.

 

The Company recognizes the amortization of the right-of-use asset for its finance leases on a straight-line basis over the reasonably assured lease term in depreciation and amortization in the consolidated statements of operations. The interest expense related to finance leases is recognized using the effective interest method and is included within interest expense, net.

 

For all leases, rent payments that are based on a fixed index or rate at the lease commencement date are included in the measurement of right-of-use assets and lease liabilities at the lease commencement date. Rent payments that vary based on the outcome of future indices, rates, or the Company’s revenues are expensed in the period incurred.

 

The Company has previously elected the practical expedient to not separate lease and non-lease components. The Company’s non-lease components are primarily related to property maintenance, which varies based on future outcomes, and thus is recognized in rent expense when incurred. In addition, the Company elected to exclude short-term leases, or leases with a term of 12 months or less that do not contain a purchase option that the Company is reasonably certain to exercise, from the right-of-use asset and lease liability balances.

 

As part of our overall plan to improve liquidity during the COVID-19 pandemic, the Company negotiated with certain lessors to defer or waive certain rent payments on leased buildings. Cash payment deferrals and waivers have been separately recorded in the period arrangements occurred, and therefore, there have been no remeasurements to the lease liabilities and right-of-use assets associated with the sites that received concessions. The Company accounted for the deferrals of lease payments as if there are no changes in the lease contract. Deferred amounts have been recognized in accounts payable and subsequent reversals will occur once the payments are made. As of January 1, 2023 and January 2, 2022, less than $1 million and $12 million, respectively, is recorded in accounts payable in the consolidated balance sheets related to deferred lease payments.

 

Sale Leaseback Transactions

 

The Company accounts for a transaction as a sale of an asset and a leaseback of that asset only if the buyer-lessor obtains control of the asset in accordance with the provisions of ASC 606, Revenue from Contracts with Customers (Topic 606). In these circumstances, the Company (as the seller-lessee) derecognizes the carrying amount of the asset, recognizes the transaction price for the sale, and accounts for the lease in accordance with Topic 842. When a sale and leaseback transaction does not qualify for sale accounting, the Company does not derecognize the underlying asset and accounts for the transaction as a financing obligation.
Debt Issuance Costs

Debt Issuance Costs

 

Debt issuance costs relate to the Company’s debt instruments. These costs are reflected as a deduction from the carrying amount of the related debt instrument, with the exception of the Company’s revolving credit facility, for which debt issuance costs are reflected as a current asset following repayment in full of the amount drawn under the facility during the fiscal year ended January 2, 2022. Debt issuance costs are deferred and amortized over the term of the related debt instrument using the effective interest method. As of January 1, 2023 and January 2, 2022, these costs totaled $10 million (including $1 million presented within prepaid expenses and other current assets) and $13 million (including $1 million presented within prepaid expenses and other current assets), respectively. Amortization expense associated with debt issuance costs (excluding write-offs recognized upon extinguishment of debt), which is

included within interest expense, net, totaled $4 million, $5 million, and $6 million for the fiscal years ended January 1, 2023, January 2, 2022 and January 3, 2021, respectively.
Fair Value Measurements

Fair Value Measurements

 

The Company has various financial instruments measured at fair value on a periodic basis for disclosure purposes. See Note 13, Fair Value Measurements, for further information. The Company also applies the fair value measurement framework to various nonrecurring measurements for its financial and nonfinancial assets and liabilities.

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date (an exit price). The Company uses the three-level valuation hierarchy for classification of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability and may be considered observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized below.

Level 1 Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 Valuation is based upon quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument.

Level 3 Valuation is based upon other unobservable inputs that are significant to the fair value measurement.

 

The classification of assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement in its entirety. Proper classification of fair value measurements within the valuation hierarchy is considered each reporting period. The use of different market assumptions or estimation methods may have a material effect on the estimated fair value amounts.
Revenue Recognition

Revenue Recognition

 

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account for purposes of recognizing revenue. The majority of the Company’s contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct. There is no variable consideration or obligations for returns or refunds, and no other related obligations in the Company’s contracts.

 

Payment terms and conditions vary by contract type and may include a requirement of payment up to 60 days (as described further below). In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined its contracts do not include a significant financing component.

 

The Company’s revenues are primarily derived from the following sources and are recognized when or as the Company satisfies a performance obligation by transferring a good or service to a customer.

 

Membership Revenues

 

Membership revenues are comprised of annual membership fees and one-time initial registration fees.

 

Memberships are offered on an annual basis for access to Houses. Annual membership fees are paid annually, quarterly or monthly and are deferred and recognized over the term to which the payment relates. Revenue is measured based on the amount invoiced for the member’s annual membership fee. The current portion of deferred revenue relates primarily to annual membership fees. There is no non-current deferred revenue relating to annual membership fees.

 

One-time registration fees are non-refundable and are invoiced to the member on their acceptance of membership. Such registration fees are recognized as non-current deferred revenue upon payment, and are recognized as revenue over the estimated average membership life of 20 years. Registration fees of $2 million, $2 million, and $1 million were recognized as revenue in the fiscal years

ended January 1, 2023, January 2, 2022, and January 3, 2021 respectively. As of January 1, 2023 and January 2, 2022, current deferred revenue related to one-time registration fees totaled $2 million and $2 million, respectively, and non-current deferred revenue related to such fees totaled $27 million and $28 million, respectively.

 

House Introduction Credits

 

New members admitted on or after April 4, 2022 are required to purchase House Introduction Credits ("House Introduction Credits") as part of their membership, per the House rules. House Introduction Credits are credits of an equivalent value to cash within Houses and are redeemable against purchases of food and beverage items and bedroom stays at the Houses. House Introduction Credits expire after three months from the date of issuance, where legally permitted in the regions we operate, if not utilized or if the Company terminates a member's House membership. House Introduction Credits are recognized upon issuance as deferred revenue on our consolidated balance sheets. Revenue from House Introduction Credits are recognized as In-House revenues when redeemed by members, and as breakage revenue within Membership revenues upon expiration or in the period when we are able to reliably estimate expected breakage to the extent that they are unredeemed and further redemption is deemed remote.

 

In-House Revenues

 

In-House revenues represent all revenues generated within our Houses and primarily include revenues from food and beverage, accommodation, and spa products and treatments.

 

Revenue from food and beverage sales in the Company’s Houses is measured based on the amount invoiced for food and beverage purchased by the customer. Revenues are recognized when the goods are consumed. Payment is collected from the customer at the same time as the performance obligation is satisfied and, therefore, there are no material receivables, contract assets or contract liabilities related to food and beverage sales.

 

Hotel accommodation revenue is recognized when the rooms are occupied. Revenue is measured based on the amount invoiced for the room as specified in the contract when the room booking is made. Deposits received in advance of the hotel accommodation are deferred as contract liabilities and recognized as revenue when the customer occupies the room. As of January 1, 2023 and January 2, 2022, advance deposits of $12 million and $9 million, respectively, were recorded as accrued liabilities on the consolidated balance sheets.

 

Retail sales represent sales of goods and services, including from spas and cinema properties. Revenue from these transactions is recognized at the point in time when the goods and services have been delivered or rendered. Sales made online include shipping revenue and are recognized on dispatch to the customer. Payment terms with respect to retail sales and wholesale sales range from immediate payment at point of sale up to approximately 60 days. Amounts invoiced to customers for completed sales are recorded within accounts receivable on the consolidated balance sheets.

 

Other Revenues

 

Other revenues include all revenues that are not generated within our Houses. This includes revenues from Scorpios, Soho Works and our stand-alone restaurants, procurement fees from Soho House Design ("SHD"), Soho Home and Cowshed retail products and other revenues from products and services that we provide outside of our Houses, as well as management fees from the Ned and LINE and Saguaro hotels. For further information regarding the Company’s management agreement with The Ned, refer to Note 4, Consolidated Variable Interest Entities.

 

Revenue recognized from Soho House Design totaled $22 million, $13 million, and $14 million for the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021, respectively. During the fiscal year ended December 29, 2019, Soho House Design ceased providing build-out services as a result of the Company’s decision to shift strategic focus to the higher-margin design services. Some of SHD’s build-out and design services are provided as part of the Company’s in-house development activities (including to certain related parties as described in Note 22, Related Parties), which do not generate revenues from third parties. The percentage of Soho House Design revenues relating to build-out and design contracts from unaffiliated third parties was 43% and 7% during the fiscal years ended January 1, 2023 and January 2, 2022, respectively. Soho House Design’s revenues relating to build-out and design contracts from unaffiliated third parties were immaterial during the fiscal year ended January 3, 2021.

 

Build-out and design contracts consist of a single performance obligation which is satisfied over time as the design and build work is completed and verified by third party contractors against specified contract milestones (output method of progress). The Company invoices for the work completed in accordance with the payment terms of the customer’s contract.

 

Sponsorship income is recognized upon the successful completion of the related event. Food and beverage sales from restaurants not located in one of the Company’s Houses or hotels are recognized in a manner similar to In-House food and beverage sales, as previously described.

 

Practical Expedients

 

The Company applies the practical expedient not to disclose the amount of the transaction price allocated to the remaining performance obligations and an explanation of when the Company expects to recognize that amount as revenue. In addition, the Company applies the practical expedient and does not disclose information about remaining performance obligations for contracts that have original expected durations of one year or less.
In-House Operating Expenses and Other Operating Expenses

In-House Operating Expenses and Other Operating Expenses

 

In-House operating expenses represent the cost of sales of our In-House revenues and consist primarily of the cost of food and beverage products, employee-related costs for In-House staff members, rent expense, and utility costs. Other operating expenses represent the cost of sales of our Other revenues and consist primarily of the cost of retail products, food and beverage product costs associated with non-House restaurant operations, and employee-related costs for non-House staff members.
Government Grants

Government Grants

 

Throughout Fiscal 2020, as a result of impacts from the COVID-19 pandemic, governmental agencies in the United Kingdom and other European countries provided the Company grants primarily to support payroll needs. These government grants are exclusive of funds received (and eventually paid off) under the Paycheck Protection Program enacted by the U.S. Coronavirus Aid, Relief, and Economic Security Act, which were accounted for as a borrowing (refer to Note 12, Debt, for more information). Government grants are recognized when there is reasonable assurance that cash will be received and that conditions attached to the grant have been met. Such government grants totaled $5 million during the fiscal year ended January 1, 2023 and are presented as a reduction of payroll expenses within In-House operating expenses ($5 million) and other operating expenses (less than $1 million) on the consolidated statements of operations. During the fiscal year ended January 2, 2022, government grants totaled $21 million and were presented as a reduction of payroll expenses within In-House operating expenses ($17 million), other operating expenses ($3 million) and general and administrative expense ($1 million) on the consolidated statements of operations.
Interest Expense

Interest Expense

 

Interest expense is charged to the consolidated statements of operations over the term of the debt such that the amount charged is at a constant rate on the carrying amount (i.e. using the effective interest method). Interest expense includes the amortization of debt issuance costs, which are initially recognized as a reduction in the proceeds of the associated debt instrument, and interest expense on finance leases.

Business Interruption and Other Insurance Claims

Business Interruption and Other Insurance Claims

 

The Company maintains insurance policies to cover business interruption and property damage with terms that it believes to be adequate and appropriate. When the Company receives proceeds from the insurance claim in connection with property damage, which reimburses the replacement cost for repair or replacement of damaged assets, the proceeds are recognized as a reduction against the value of the assets written off. Business interruption proceeds which reimburse the time-element of actual costs and lost profits following damage to property are recognized as non-operating income. Business interruption proceeds related to the cost to expedite repairs, retention pay to workers temporarily displaced, and additional expenses to stay in business following damage to property are recognized as a reduction of the related expense line item. If there are any outstanding receivables in respect of insurance recoveries, they are recognized only when the Company deems collection to be virtually certain.
Income Taxes

Income Taxes

 

Significant judgment is involved in determining the provision for income taxes. There are certain transactions for which the ultimate tax determination is unclear due to uncertainty in the ordinary course of business. The Company recognizes tax liabilities based on its assessment of whether its tax return positions are supportable, and more likely than not to be sustained, based on the technical merits and assuming the position will be examined by the relevant taxing authority that has full knowledge of all relevant information. Where the Company has determined that its tax return filing position does not satisfy the more likely than not recognition threshold, the Company will record an uncertain tax position. Each period the Company assesses uncertain tax positions for recognition, measurement and effective settlement. The Company recognizes accrued interest and penalties for any unrecognized tax benefits as a component of income tax (benefit) expense.

 

Income tax (benefit) expense consists of taxes currently payable and changes in deferred tax assets and liabilities calculated according to local tax rules. Deferred tax assets and liabilities are based on temporary differences that arise between carrying values of assets and liabilities used for financial reporting purposes and amounts used for taxation purposes and the future tax benefits of tax loss carry forwards. A deferred tax asset is recognized only to the extent that it is more likely than not that future taxable profits will be available against which the asset can be utilized.

 

Significant judgment is required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for a valuation allowance, management considers all available evidence for each jurisdiction, including past operating results, estimates of future taxable income and the feasibility of ongoing tax planning strategies. In the event that the Company changes its determination as to the amount of deferred tax assets that can be realized, the Company will adjust its valuation allowance with a corresponding impact to income tax (benefit) expense in the period in which such determination is made.

 

The amount of deferred tax recognized in any period is based on tax rates enacted as of the balance sheet date. The impact of tax law changes is recognized in periods when the change is enacted. The Company classifies all deferred tax assets and liabilities, including any related valuation allowance, as non-current on the consolidated balance sheets.
Indirect Taxes

Indirect Taxes

 

The Company remits sales, value added and other indirect taxes to various taxing jurisdictions as a result of revenue earned from the sale of products and services to customers. Specific sales tax rates applicable to the Company’s products and services vary by taxing jurisdiction. The Company records sales, value added and other indirect taxes as liabilities when incurred. Revenue is recognized net of sales, value added and other indirect taxes.
Foreign Currency and Operations

Foreign Currency and Operations

 

During periods preceding the IPO that are presented in these consolidated financial statements, our business was conducted through SHHL. The functional currency of SHHL is the British pound sterling ("GBP"). As a result of the Reorganization Transactions in connection with the IPO, SHHL became a wholly-owned subsidiary of MCG. The functional currency of MCG is the United States dollar ("USD"). Our reporting currency for the consolidated financial statements is the USD for all periods presented.

 

The functional currency is the currency of the primary economic environment in which an entity’s operations are conducted. The functional currency of the Company’s subsidiaries is generally the same as their local currency. The Company translates the financial statements of its subsidiaries into the presentation currency using exchange rates in effect on the balance sheet date for assets and liabilities and average exchange rates for the period for statement of operations accounts, with the difference recognized in accumulated other comprehensive (loss) income. The following exchange rates were used to translate the financial statements of the Company and its foreign subsidiaries into USD:

 

 

As of

 

January 1, 2023

 

January 2, 2022

Great Britain pound sterling

$

1.21

 

$

1.35

Canadian dollar

 

0.74

 

 

0.79

Euro

 

1.07

 

 

1.14

Hong Kong dollar

 

0.13

 

 

0.13

Israeli new shekel

 

0.28

 

 

0.32

Danish krone

 

0.14

 

 

N/A

Swedish krona

 

0.10

 

 

N/A

Mexican peso

 

0.05

 

 

N/A

Qatari riyal

 

0.27

 

 

N/A

 

 

For the Fiscal Year Ended

 

January 1, 2023

 

January 2, 2022

 

January 3, 2021

Great Britain pound sterling

$

1.23

 

$

1.38

 

$

1.28

Canadian dollar

 

0.77

 

 

0.80

 

 

0.74

Euro

 

1.05

 

 

1.18

 

 

1.14

Hong Kong dollar

 

0.13

 

 

0.13

 

 

0.13

Israeli new shekel

 

0.30

 

 

0.31

 

 

0.29

Danish krone

 

0.14

 

 

N/A

 

 

N/A

Swedish krona

 

0.10

 

 

N/A

 

 

N/A

Mexican peso

 

0.05

 

 

N/A

 

 

N/A

Qatari riyal

 

0.28

 

 

N/A

 

 

N/A

 

Foreign currency transaction gains and losses are included in other in the consolidated statements of operations. The Company recorded foreign currency transaction net losses of $70 million, net losses of $26 million, and net gains of $3 million during the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021, respectively.

Pre-Opening Expenses

Pre-Opening Expenses

 

Pre-opening expenses include costs associated with the acquisition, opening, conversion and initial setup of new and converted sites, including rent, overhead expenses, pre-opening marketing and incremental wages to support the “ramp up” period of time to support the site in the initial period following opening. These costs are expensed as incurred and are included in pre-opening expenses in the consolidated statements of operations. The entire balance of these costs is related to pre-opening activities for our Houses in each of the periods presented.
Advertising Costs

Advertising Costs

 

The cost of advertising and media is expensed as incurred. For the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021, advertising costs totaled $7 million, $6 million, and $4 million, respectively. Advertising costs are included in general and administrative expense in the consolidated statements of operations.
Share-Based Compensation

Share-Based Compensation

 

Share-based compensation is measured at the estimated fair value of the award on the grant date and recognized as an expense on a straight-line basis over the vesting period of the award. The Company does not reduce share-based compensation for an estimate of forfeitures and will account for forfeitures when they occur. In order to determine the grant date fair value of awards granted prior to IPO, the Company applied the Black-Scholes option-pricing valuation model. The determination of fair value of these awards is subjective and involves estimates and assumptions including expected term of the awards, volatility of the Company’s shares, expected dividend yield, and the risk-free rate. The Company uses the closing stock price on the date of grant to determine the grant date fair value for restricted stock units ("RSUs").

 

Share-based compensation expense is recorded within general and administrative expense in the consolidated statements of operations. See Note 14, Share-Based Compensation, for additional information.

 

Limited reorganization of support and operations functions



During the fourth quarter of fiscal year ended January 1, 2023, the Company engaged in a limited reorganization of its support and operations functions following a change in the Company’s senior leadership. This resulted in the termination of employees in our support and operations teams. The amount recognized as an expense in fiscal year ended January 1, 2023, in “Other expenses, net”, which is not allocated to our Reported Segments, was $4 million. The majority of this obligation had been settled as of January 1, 2023, with less than $1 million expected to be settled during the first quarter of fiscal year ended December 31, 2023.

 
Offering Costs

Offering Costs

 

Direct and incremental legal and accounting costs associated with the Company’s initial public offering totaling less than $1 million and $40 million have been recorded as a reduction of offering proceeds within additional paid-in capital in the consolidated balance sheet as of January 1, 2023 and January 2, 2022, respectively. In addition, the Company incurred $14 million of costs related to the offering which were recognized in other in the consolidated statement of operations for Fiscal 2021.
Comprehensive Loss

Accumulated Other Comprehensive Income

 

The entire balance of accumulated other comprehensive income is related to the cumulative translation adjustment in each of the periods presented. The changes in the balance of accumulated other comprehensive income are attributable solely to the net change in the cumulative translation adjustment in each of the periods presented, and include the error correction described above during Fiscal 2021.
Net Loss per Share

Net Loss per Share

 

The Company computes net loss per share using the two-class method. As the liquidation and dividend rights are identical, the undistributed earnings or losses are allocated on a proportionate basis to each class of common stock, and the resulting basic and diluted loss per share attributable to common stockholders are therefore the same for Class A and B common stock. Basic loss per share is computed by dividing loss available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted loss per share is based on the weighted-average number of common shares outstanding for the period and respective share equivalents outstanding at the end of the period, unless the effect is anti-dilutive. An anti-dilutive impact is a reduction in net loss per share resulting from the conversion, exercise, or contingent issuance of certain securities. Since the Company had net losses for all the periods presented, basic and diluted loss per share are the same, and additional potential common shares have been excluded as their effect would be anti-dilutive.

 

As discussed in Note 1, Nature of the Business, immediately prior to the IPO, the Company completed certain reorganization transactions which resulted in changes to our common stock and issued and outstanding shares but no change in relative shareholder rights, rank, or value before and after the reorganization transaction. As such, the Reorganization Transactions were considered to have an equivalent effect to a stock split and require retrospective treatment for purposes of computing loss per share. All share and per share information has been retroactively adjusted to reflect the impact of the Reorganization Transactions for all periods presented.

 

The issuance of shares in the IPO and the impact of conversion of the senior convertible preference shares into Class A common stock are included in the calculation of loss per share prospectively from the date of issuance or conversion, as the case may be.

SHHL Redeemable Preferred Shares and SHHL Redeemable C Ordinary Shares

SHHL Redeemable Preferred Shares and SHHL Redeemable C Ordinary Shares

 

As of January 3, 2021, SHHL had redeemable preferred shares and redeemable C ordinary shares outstanding, which are collectively referred to as "redeemable shares." In addition, in March 2021, the Company issued senior convertible preference shares, which were subsequently converted into Class A common stock immediately after the IPO. See Note 15, SHHL Redeemable Preferred Shares and Note 16, SHHL C Ordinary Shares, for additional information.

 

Preferred shares subject to mandatory redemption as of a specified date are classified as debt and are initially measured at fair value. Contingently redeemable shares (including shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company's control) are classified as temporary equity and initially measured at fair value.

 

When redemption is deemed to be probable, if the carrying amount of the redeemable shares is less than the redemption value, the carrying value of the shares is increased by periodic accretions so that the carrying value is equal to the redemption amount at the

earliest redemption date. Such accretion is recorded as a dividend in the consolidated statements of changes in shareholders' equity (deficit).

 

Prior to February 2019, SHHL had certain preferred shares that were redeemable after five years and were considered probable of becoming redeemable in the future. For those shares, the redemption price was fixed, such that no adjustment or accretion was required to the carrying value. Certain other redeemable shares which are neither initially redeemable nor considered to be probable to be redeemable are recorded at their initial carrying value, and an adjustment of the initial carrying amount is not made until it is probable that the shares will become redeemable. During the second fiscal quarter of 2021, the Company concluded that certain SHHL redeemable preferred shares were probable of becoming redeemable and, therefore, the shares were accreted to their redemption value; see Note 15, SHHL Redeemable Preferred Shares, for additional information.

Commitments and Contingencies

Commitments and Contingencies

 

The Company is subject to loss contingencies that arise out of operations in the normal course of business. Periodically, the Company reviews the status of each significant matter and assesses the potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable, and the amount can be reliably estimated, such amount is recognized in other liabilities on the consolidated balance sheets.

 

Contingent liabilities are measured at the Company’s best estimate of the expenditure required to settle the obligation as of the end of the reporting period. If there is no best estimate, an amount is recorded for the lowest amount of the range of potential outcomes. Refer to Note 18, Commitments and Contingencies, for more information.
Future Accounting Standards

Future Accounting Standards

 

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). The ASU adds to US GAAP an impairment model (known as the current expected credit loss, or “CECL,” model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which is intended to result in the more timely recognition of losses. Under the CECL model, entities will estimate credit losses over the entire contractual term of the instrument from the date of initial recognition of the financial instrument. The update is effective for the Company for fiscal years beginning after December 15, 2022 or the interim period in which the Company loses emerging growth company status, and should be adopted using a modified retrospective approach, which applies a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective.

 

In November 2018 and April 2019, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses and ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, respectively. These amendments add clarity to certain areas within ASU 2016-13. In May 2019, the FASB issued ASU 2019-05, Financial Instruments - Credit Losses (Topic 326), Target Transition Relief, which provided transition relief for entities adopting ASU 2016-13 by allowing the election of the fair value option on certain financial instruments. The effective date and the transition methodology for the amendments in these updates are the same as in ASU 2016-13.

 

ASU 2016-13 and related updates apply to how the Company evaluates impairments of its trade receivables and notes receivable. The Company does not expect these ASUs to have a material impact on its consolidated financial statements and related disclosures.

 

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The ASU requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers. The update is effective for the Company for fiscal years beginning after December 15, 2023 or the interim period in which the Company loses emerging growth company status, and should be adopted using a prospective approach to business combinations occurring on or after the effective date of the amendments. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.
Recently Adopted Accounting Standards

Recently Adopted Accounting Standards

 

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance. The amendments in this update require additional annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. The update is effective for the Company for fiscal years beginning after December 15, 2021, and should be adopted prospectively to all transactions within the scope of the amendments that are reflected in financial statements at the date of initial application and new transactions entered into after the date of initial application, or retrospectively to those transactions. The Company adopted ASU 2021-10 on January 3, 2022 and applied its provisions prospectively. The adoption of ASU 2021-10 did not have a significant effect on the Company’s consolidated financial statements and related disclosures.

 

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in US GAAP. The ASU’s amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company elected to early adopt the ASU on January 4, 2021. The provisions of this ASU have been applied on a modified retrospective basis and did not have a material impact on the Company’s consolidated financial statements and related disclosures.

 

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The purpose of ASU No. 2019-12 is to continue the FASB’s Simplification Initiative to reduce complexity in accounting standards. The amendments in ASU No. 2019-12 simplify the accounting for income taxes by removing certain exceptions related to the incremental approach for intra-period tax allocation, the requirement to recognize or derecognize deferred tax liabilities related to equity method investments that are also foreign subsidiaries, and the methodology for calculating income taxes in an interim period. The Company adopted the ASU on January 3, 2022 for Fiscal 2022. The adoption of ASU 2019-12 did not materially affect the Company's consolidated financial statements and related disclosures.
v3.22.4
Summary of Significant Accounting Policies (Tables)
 12 Months Ended
Jan. 01, 2023
Accounting Policies [Abstract]  
Summary of restrictions on cash and cash equivalents

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown on the consolidated statements of cash flows.

 

 

 

As of

 

(in thousands)

January 1, 2023

 

 

January 2, 2022

 

 

January 3, 2021

 

Cash and cash equivalents

$

 

182,115

 

 

$

 

212,833

 

 

$

 

52,887

 

Restricted cash

 

 

7,928

 

 

 

 

7,829

 

 

 

 

7,083

 

Total cash, cash equivalents, and restricted cash shown on the consolidated statement of cash flows

$

 

190,043

 

 

$

 

220,662

 

 

$

 

59,970

 

 
Schedule of Estimated Useful Lives of Property Plant and Equipment

Depreciation is recorded using the straight-line method over the assets’ estimated useful lives, which are generally as follows:

 

Buildings

50-100 years

Leasehold improvements

Lesser of useful life or remaining lease term

Fixtures and fittings

2-5 years

Office equipment and other

2-4 years

Finance lease property

Reasonably assured lease term

 
Summary of foreign exchange rates The following exchange rates were used to translate the financial statements of the Company and its foreign subsidiaries into USD:

 

 

As of

 

January 1, 2023

 

January 2, 2022

Great Britain pound sterling

$

1.21

 

$

1.35

Canadian dollar

 

0.74

 

 

0.79

Euro

 

1.07

 

 

1.14

Hong Kong dollar

 

0.13

 

 

0.13

Israeli new shekel

 

0.28

 

 

0.32

Danish krone

 

0.14

 

 

N/A

Swedish krona

 

0.10

 

 

N/A

Mexican peso

 

0.05

 

 

N/A

Qatari riyal

 

0.27

 

 

N/A

 

 

For the Fiscal Year Ended

 

January 1, 2023

 

January 2, 2022

 

January 3, 2021

Great Britain pound sterling

$

1.23

 

$

1.38

 

$

1.28

Canadian dollar

 

0.77

 

 

0.80

 

 

0.74

Euro

 

1.05

 

 

1.18

 

 

1.14

Hong Kong dollar

 

0.13

 

 

0.13

 

 

0.13

Israeli new shekel

 

0.30

 

 

0.31

 

 

0.29

Danish krone

 

0.14

 

 

N/A

 

 

N/A

Swedish krona

 

0.10

 

 

N/A

 

 

N/A

Mexican peso

 

0.05

 

 

N/A

 

 

N/A

Qatari riyal

 

0.28

 

 

N/A

 

 

N/A
v3.22.4
Consolidated Variable Interest Entities (Tables)
 12 Months Ended
Jan. 01, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Summary of consolidated VIEs' assets and liabilities included in the condensed consolidated balance sheets

The following table summarizes the carrying amounts and classification of the consolidated VIEs’ assets and liabilities included in the consolidated balance sheets. The obligations of the consolidated VIEs other than Soho Restaurants Limited are non-recourse to the Company, and the assets of the VIEs can be used only to settle those obligations.

 

 

 

As of

(in thousands)

 

January 1, 2023

 

January 2, 2022

Cash and cash equivalents

 

$7,941

 

$2,986

Accounts receivable

 

1,823

 

3,407

Inventories

 

19

 

14

Prepaid expenses and other current assets

 

3,283

 

4,608

Total current assets

 

13,066

 

11,015

Property and equipment, net

 

32,288

 

43,501

Operating lease assets

 

99,717

 

114,522

Other intangible assets, net

 

284

 

160

Other non-current assets

 

181

 

204

Total assets

 

145,536

 

169,402

Accounts payable

 

337

 

1,011

Accrued liabilities

 

8,131

 

8,752

Indirect and employee taxes payable

 

1,548

 

—

Current portion of related party loans

 

24,612

 

21,092

Current portion of operating lease liabilities - sites trading more than one year

 

4,362

 

4,507

Other current liabilities

 

4,153

 

2,021

Total current liabilities

 

43,143

 

37,383

Operating lease liabilities, net of current portion - sites trading more than one year

 

115,182

 

133,753

Other non-current liabilities

 

—

 

—

Total liabilities

 

158,325

 

171,136

Net assets

 

$(12,789)

 

$(1,734)
v3.22.4
Equity Method Investments (Tables)
 12 Months Ended
Jan. 01, 2023
Equity Method Investments and Joint Ventures [Abstract]  
Schedule Of Equity Method Investment Summarized Ownership Interests Equity method investment ownership interests in each of the periods presented in these consolidated financial statements are as follows:

 

 

Ownership Interest (Percentage)

 

Equity Method Investment

January 1, 2023

 

 

January 2, 2022

 

 

January 3, 2021

 

Soho House Toronto (House)*

 

 

 

 

 

 

 

 

Soho House Toronto Partnership

 

50

 

 

 

50

 

 

 

50

 

Soho House—Cipura (Miami) (Restaurant)(1)

 

 

 

 

 

 

 

 

Soho House—Cipura (Miami), LLC

n/a

 

 

n/a

 

 

 

50

 

139 Ludlow Street New York (Property)

 

 

 

 

 

 

 

 

139 Ludlow Acquisition, LLC

 

33.3

 

 

 

33.3

 

 

 

33.3

 

56-60 Redchurch Street, London (Property and Hotel)*

 

 

 

 

 

 

 

 

Raycliff Red LLP

 

50

 

 

 

50

 

 

 

50

 

Raycliff Shoreditch Holdings LLP

 

50

 

 

 

50

 

 

 

50

 

Redchurch Partner Limited

 

50

 

 

 

50

 

 

 

50

 

Soho House Barcelona (Property and House)*

 

 

 

 

 

 

 

 

Mimea XXI S.L.

 

50

 

 

 

50

 

 

 

50

 

Mirador Barcel S.L.

 

50

 

 

 

50

 

 

 

50

 

Little Beach House Barcelona S.L.

 

50

 

 

 

50

 

 

 

50

 

Soho Beach House Canouan (House)

 

 

 

 

 

 

 

 

Soho Beach House Canouan Limited

 

20

 

 

 

20

 

 

 

—

 

*Variable interest entity

 

 

 

 

 

 

 

 

 

(1)
During Fiscal 2021, the Company acquired the remaining 50% interest in Cipura and had 100% ownership of the investment as of January 2, 2022. The entity became a consolidated subsidiary of the Company beginning on the date of acquisition, as described in Note 3, Acquisitions.
Summary of the company's maximum exposure to losses related to its equity method investments

The following tables present summarized financial information for all unconsolidated equity method investees. The Company’s maximum exposure to losses related to its equity method investments is limited to its ownership interests as well as certain guarantees as described in Note 18, Commitments and Contingencies.

 

 

 

For the Fiscal Year Ended

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022 (1)

 

 

January 3, 2021

 

Revenues

 

$

45,274

 

 

$

32,022

 

 

$

30,547

 

Operating income (loss)

 

 

7,131

 

 

 

(4,442

)

 

 

(3,923

)

Net income (loss)(2)

 

 

3,133

 

 

 

(5,227

)

 

 

(6,737

)
(1)
Includes the financial information of Cipura through May 10, 2021.
(2)
The net income / (loss) shown above relates entirely to continuing operations.
Summary of equity method investment summarized balance sheet

 

 

As of

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022

 

Current assets

 

$

18,916

 

 

$

33,705

 

Non-current assets

 

 

142,324

 

 

 

137,753

 

Total assets

 

 

161,240

 

 

 

171,458

 

Current liabilities

 

 

8,551

 

 

 

13,976

 

Non-current liabilities

 

 

101,820

 

 

 

121,311

 

Total liabilities

 

 

110,371

 

 

 

135,287

 

Net assets

 

$

50,869

 

 

$

36,171

 
v3.22.4
Leases (Tables)
 12 Months Ended
Jan. 01, 2023
Lessee, Lease, Description [Line Items]  
Summary of the maturity of the Company's operating and finance lease liabilities

The maturity of the Company’s operating and finance lease liabilities as of January 1, 2023 is as follows:

 

(in thousands)
Fiscal year ended

 

Operating
Leases

 

 

Finance
Leases

 

Undiscounted lease payments

 

 

 

 

 

 

2023

 

$

133,942

 

 

$

5,734

 

2024

 

 

137,792

 

 

 

5,735

 

2025

 

 

140,910

 

 

 

5,774

 

2026

 

 

141,807

 

 

 

5,699

 

2027

 

 

133,194

 

 

 

5,699

 

Thereafter

 

 

1,619,510

 

 

 

216,541

 

Total undiscounted lease payments

 

 

2,307,155

 

 

 

245,182

 

Present value adjustment

 

 

1,058,079

 

 

 

168,544

 

Total net lease liabilities

 

$

1,249,076

 

 

$

76,638

 
Summary of the supplemental disclosure for the statement of cash flows related to operating and finance leases

The following information represents supplemental disclosure for the statement of cash flows related to operating and finance leases:

 

 

 

For the Fiscal Year Ended

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022

 

 

January 3, 2021

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

 

 

 

 

 

 

Operating cash flows from operating leases

 

$

(118,269

)

 

$

(86,523

)

 

$

(67,412

)

Interest payments for finance leases

 

 

(5,002

)

 

 

(5,037

)

 

 

(5,112

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

Principal payments for finance leases

 

$

(528

)

 

$

(281

)

 

$

(230

)

Supplemental disclosures of non-cash investing and financing activities:

 

 

 

 

 

 

 

 

 

Operating lease assets obtained in exchange for new operating lease liabilities

 

$

133,743

 

 

$

170,105

 

 

$

67,235

 

Acquisitions of property and equipment under finance leases

 

 

12,315

 

 

 

—

 

 

 

—

 
Summary of the additional information related to operating and finance leases

The following summarizes additional information related to operating and finance leases:

 

 

 

As of

 

 

January 1, 2023

 

January 2, 2022

Weighted-average remaining lease term

 

 

 

 

Finance leases

 

43 years

 

44 years

Operating leases

 

17 years

 

18 years

Weighted-average discount rate

 

 

 

 

Finance leases

 

7.29%

 

7.00%

Operating leases

 

7.93%

 

8.06%

 
Summary of the Company's estimated future undiscounted lease payments for current leases

The following summarizes the Company’s estimated future undiscounted lease payments for current leases signed but not commenced, including properties where the SHD team is acting as the construction manager:

 

(in thousands)

 

Operating
Leases Under

 

Fiscal year ended

 

Construction

 

Estimated total undiscounted lease payments

 

 

 

2023

 

$

4,342

 

2024

 

 

27,252

 

2025

 

 

59,323

 

2026

 

 

73,904

 

2027

 

 

77,513

 

Thereafter

 

 

1,229,816

 

Total undiscounted lease payments expected for leases signed but not commenced

 

$

1,472,150

 
DTLA Property [Member]  
Lessee, Lease, Description [Line Items]  
Summary of the supplemental disclosure for the statement of cash flows related to operating and finance leases

The following information represents supplemental disclosure for the statement of cash flows related to the financing obligation for the DTLA property:

 

 

For the Fiscal Year Ended

 

(in thousands)

January 1, 2023

 

 

January 2, 2022

 

 

January 3, 2021

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

Interest payments for financing obligation

$

 

(6,894

)

 

$

 

(5,626

)

 

$

 

(6,626

)

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

 

Capitalized interest

$

 

—

 

 

$

 

—

 

 

$

 

—

 

Purchase of property and equipment

 

 

—

 

 

 

 

—

 

 

 

 

—

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

 

Principal payments on financing obligation

$

 

(1,578

)

 

$

 

(1,334

)

 

$

 

—

 

Proceeds from financing obligation

 

 

—

 

 

 

 

—

 

 

 

 

3,652

 

 
Summary of the company's future undiscounted finance lease

The following summarizes the Company's future undiscounted lease payments for the DTLA property:

 

(in thousands)

Financing Obligation

 

Fiscal year ended

 

 

Undiscounted lease payments

 

 

2023

$

7,031

 

2024

 

7,172

 

2025

 

7,316

 

2026

 

7,462

 

2027

 

7,611

 

Thereafter

 

116,442

 

Total undiscounted lease payments

 

153,034

 

Present value adjustment

 

76,795

 

Total net financing obligation

$

76,239

 
v3.22.4
Revenue Recognition (Tables)
 12 Months Ended
Jan. 01, 2023
Revenue Recognition [Abstract]  
Summary of disaggregation of revenue

The following table includes estimated revenues expected to be recognized in the future related to performance obligations that were unsatisfied (or partially unsatisfied) at the end of the reporting period ending January 1, 2023.

 

(in thousands)

January 1, 2023

 

 

Future periods

 

Membership, registration fees, and House Introduction Credits

$

78,308

 

 

$

27,118

 

Total future revenues

$

78,308

 

 

$

27,118

 

The following table provides information about contract receivables, contract assets and contract liabilities from contracts with customers:

 

 

 

As of

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022

 

Contract receivables

 

$

42,215

 

 

$

19,338

 

Contract assets

 

 

9,344

 

 

 

5,553

 

Contract liabilities

 

 

130,975

 

 

 

113,630

 
Summary of Changes in Contract Liabilities [Table Text Block] Significant changes in contract liabilities balances during the period are as follows:

 

 

 

For the Fiscal Year Ended

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022

 

 

January 3, 2021

 

Opening balance

 

$

113,630

 

 

$

85,723

 

 

$

93,731

 

Revenue recognized that was included in the contract liability balance at the beginning of the period

 

 

(86,111

)

 

 

(61,763

)

 

 

(71,425

)

Increases due to cash received during the period

 

 

104,652

 

 

 

89,914

 

 

 

62,880

 

Foreign currency translation

 

 

(1,196

)

 

 

(244

)

 

 

537

 

Closing balance

 

$

130,975

 

 

$

113,630

 

 

$

85,723

 
v3.22.4
Prepaid Expenses and Other Current Assets (Tables)
 12 Months Ended
Jan. 01, 2023
Prepaid Expense and Other Assets, Current [Abstract]  
Prepaid Expenses And Other Current Assets

The table below presents the components of prepaid expenses and other current assets.

 

 

 

As of

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022

 

Amounts owed by equity method investees

 

$

1,492

 

 

$

879

 

Prepayments and accrued income

 

 

27,416

 

 

 

26,037

 

Contract assets

 

 

9,344

 

 

 

5,553

 

Other receivables

 

 

52,849

 

 

 

24,535

 

Total prepaid expenses and other current assets

 

$

91,101

 

 

$

57,004

 
v3.22.4
Property and Equipment, Net (Tables)
 12 Months Ended
Jan. 01, 2023
Property, Plant and Equipment, Net [Abstract]  
Property and Equipment

Property and equipment is comprised of the following:

 

 

 

As of

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022

 

Land and buildings

 

$

213,901

 

 

$

216,540

 

Leasehold improvements

 

 

353,181

 

 

 

300,821

 

Fixtures and fittings

 

 

336,758

 

 

 

287,866

 

Office equipment and other

 

 

42,660

 

 

 

41,176

 

Construction in progress

 

 

20,394

 

 

 

81,208

 

Finance property lease

 

 

64,521

 

 

 

73,110

 

 

 

 

1,031,415

 

 

 

1,000,721

 

Less: Accumulated depreciation

 

 

(384,414

)

 

 

(315,760

)

 

 

$

647,001

 

 

$

684,961

 

 
v3.22.4
Goodwill and Intangible Assets (Tables)
 12 Months Ended
Jan. 01, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Summary of Goodwill

A summary of goodwill for each of the Company’s applicable reportable segments from December 29, 2019 to January 1, 2023 is as follows:

 

(in thousands)

 

UK

 

 

North America

 

 

Europe and
ROW

 

 

Total

 

December 29, 2019

 

$

97,372

 

 

$

28,780

 

 

$

65,025

 

 

$

191,177

 

Foreign currency translation adjustment

 

 

4,230

 

 

 

—

 

 

 

6,075

 

 

 

10,305

 

January 3, 2021

 

$

101,602

 

 

$

28,780

 

 

$

71,100

 

 

$

201,482

 

Cipura Acquisition (Note 3)

 

 

—

 

 

 

16,623

 

 

 

—

 

 

 

16,623

 

LINE and Saguaro Acquisition (Note 3)

 

 

—

 

 

 

2,043

 

 

 

—

 

 

 

2,043

 

Foreign currency translation adjustment

 

 

(937

)

 

 

—

 

 

 

(4,954

)

 

 

(5,891

)

January 2, 2022

 

$

100,665

 

 

$

47,446

 

 

$

66,146

 

 

$

214,257

 

Foreign currency translation adjustment

 

 

(10,690

)

 

 

—

 

 

 

(3,921

)

 

 

(14,611

)

January 1, 2023

 

$

89,975

 

 

$

47,446

 

 

$

62,225

 

 

$

199,646

 
Summary of Finite-lived Intangible Assets

A summary of finite-lived intangible assets as of January 1, 2023 and January 2, 2022 is as follows:

 

 

 

 

As of

 

 

 

 

January 1, 2023

 

 

January 2, 2022

 

(in thousands)

Average Amortization Period (in years)

 

Gross Carrying Value

 

 

Accumulated Amortization

 

 

Net Carrying Value

 

 

Gross Carrying Value

 

 

Accumulated Amortization

 

 

Net Carrying Value

 

Brand

24

 

$

109,420

 

 

$

50,358

 

 

$

59,062

 

 

$

114,784

 

 

$

45,749

 

 

$

69,035

 

Membership list

20

 

 

15,748

 

 

 

8,890

 

 

 

6,858

 

 

 

16,144

 

 

 

8,131

 

 

 

8,013

 

Hotel management agreements

15

 

 

23,600

 

 

 

2,401

 

 

 

21,199

 

 

 

23,600

 

 

 

828

 

 

 

22,772

 

Website, internal-use software development costs, and other

7

 

 

72,813

 

 

 

33,964

 

 

 

38,849

 

 

 

57,563

 

 

 

25,225

 

 

 

32,338

 

 

 

 

$

221,581

 

 

$

95,613

 

 

$

125,968

 

 

$

212,091

 

 

$

79,933

 

 

$

132,158

 

 
Schedule of future amortization expense The following table represents estimated aggregate amortization expense for each of the next five fiscal years:

 

(in thousands)

 

 

 

2023

$

 

19,863

 

2024

 

 

17,314

 

2025

 

 

15,167

 

2026

 

 

11,064

 

2027

 

 

7,795

 

 
v3.22.4
Accrued Liabilities and Other Current Liabilities (Tables)
 12 Months Ended
Jan. 01, 2023
Payables and Accruals [Abstract]  
Schedule of Accrued Liabilities

The table below presents the components of accrued liabilities.

 

 

 

As of

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022

 

Accrued interest

 

$

440

 

 

$

727

 

Hotel deposits

 

 

11,758

 

 

 

9,246

 

Trade, capital and other accruals

 

 

71,914

 

 

 

53,154

 

Total accrued liabilities

 

$

84,112

 

 

$

63,127

 
v3.22.4
Debt (Tables)
 12 Months Ended
Jan. 01, 2023
Debt Disclosure [Abstract]  
Summary of Property Mortgage Loans, Net of Debt Issuance Costs

Debt balances, net of debt issuance costs, are as follows:

 

 

 

As of

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022

 

Senior Secured Notes, interest at 8.1764% for the Initial Notes and 8.5% for the Additional Notes, maturing March 2027

 

$

570,712

 

 

$

447,719

 

Other loans (see additional description below)

 

 

10,197

 

 

 

18,547

 

 

 

 

580,909

 

 

 

466,266

 

Less: Current portion of long-term debt

 

 

(1,005

)

 

 

(6,923

)

Total long-term debt, net of current portion

 

$

579,904

 

 

$

459,343

 

 

Property mortgage loans, net of debt issuance costs, are as follows:

 

 

 

As of

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022

 

Term loan, interest at 5.34%, maturing February 6, 2024

 

$

54,614

 

 

$

54,293

 

Mezzanine loan, interest at 7.25%, maturing February 6, 2024

 

 

61,573

 

 

 

60,829

 

Total property mortgage loans

 

$

116,187

 

 

$

115,122

 

 

Related party loans, net of current portion and imputed interest, are as follows:

 

 

 

As of

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022

 

Related party loans, unsecured, 7% interest bearing, maturing September 2023 (see additional description below)

 

$

24,612

 

 

$

21,092

 

Related party loans, unsecured, 4% interest bearing, maturing December 2022

 

 

—

 

 

 

569

 

 

 

 

24,612

 

 

 

21,661

 

Less: Current portion of related party loans

 

 

(24,612

)

 

 

(21,661

)

Total related party loans, net of current portion

 

$

—

 

 

$

—

 
Summary Of remaining loans consist

The other loans consist of the following:

 

 

 

Currency

 

Maturity date

 

Principal
balance as of
January 1, 2023

 

 

Applicable
interest rate
as of January 1, 2023

 

Greek Street loan

 

£

 

January 2028

 

$

3,457

 

 

 

7.5

%

Compagnie de Phalsbourg credit facility

 

€

 

January 2025

 

 

5,542

 

 

 

7

%

Greek government loan

 

€

 

July 2025

 

 

1,204

 

 

 

3.1

%
Summary of Future Principal Payments for the Company's Debt, Property Mortgage Loans, and Related Party Loans

The following table presents future principal payments for the Company’s debt, property mortgage loans, and related party loans as of January 1, 2023:

 

(in thousands)

 

 

 

2023

 

$

25,246

 

2024

 

 

117,677

 

2025

 

 

721

 

2026

 

 

7,499

 

2027

 

 

579,714

 

Thereafter

 

 

11

 

 

 

$

730,868

 
v3.22.4
Fair Value Measurements (Tables)
 12 Months Ended
Jan. 01, 2023
Fair Value Disclosures [Abstract]  
Summary of Estimated Fair Values of the Company's Debt Instruments

The following table presents the estimated fair values (all of which are Level 3 fair value measurements) of the Company’s debt instruments with maturity dates in 2023 and thereafter:

 

(in thousands)

 

Carrying Value

 

 

Fair Value

 

January 1, 2023

 

 

 

 

 

 

Senior Secured Notes

 

$

570,712

 

 

$

545,362

 

Property mortgage loans

 

 

116,187

 

 

 

113,066

 

Other non-current debt

 

 

10,197

 

 

 

9,647

 

 

 

$

697,096

 

 

$

668,075

 

 

(in thousands)

 

Carrying Value

 

 

Fair Value

 

January 2, 2022

 

 

 

 

 

 

Senior Secured Notes

 

$

447,719

 

 

$

460,182

 

Property mortgage loans

 

 

115,122

 

 

 

115,122

 

Other non-current debt

 

 

12,260

 

 

 

12,260

 

 

 

$

575,101

 

 

$

587,564

 
v3.22.4
Share-Based Compensation (Tables)
 12 Months Ended
Jan. 01, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Summary of Share-Based Compensation

Share-based compensation during the fiscal years ended January 1, 2023, January 2, 2022 and January 3, 2021 was recorded in the consolidated statements of operations within a separate line item as shown in the following table:

 

 

 

For the Fiscal Year Ended

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022

 

 

January 3, 2021

 

SARs

 

$

9,425

 

 

$

15,998

 

 

$

885

 

Restricted stock awards (Growth Shares)

 

 

2,285

 

 

 

5,246

 

 

 

1,733

 

RSUs

 

 

12,595

 

 

 

5,416

 

 

 

—

 

Type III modification

 

 

1,902

 

 

 

—

 

 

 

—

 

Employer-related payroll expense(1)

 

 

1,474

 

 

 

—

 

 

 

—

 

Total share-based compensation expense

 

 

27,681

 

 

 

26,660

 

 

 

2,618

 

Tax benefit for share-based compensation expense

 

 

—

 

 

 

—

 

 

 

—

 

Share-based compensation expense, net of tax

 

$

27,681

 

 

$

26,660

 

 

$

2,618

 
(1)
Relates to employment related taxes, including employer national insurance tax in the UK. These amounts were settled in cash and are not included in additional paid-in capital or as an adjustment to reconcile net loss to net cash used in operating activities in the consolidated statements of cash flows.
 
Assumptions Used in Applying Pricing Model

The weighted-average assumptions used in valuing SARs and restricted stock awards (previously zero granted as Growth Shares) granted during each period are set forth in the following table:

 

 

For the Fiscal Year Ended

 

 

January 1, 2023

 

 

January 2, 2022

 

 

January 3, 2021

 

Expected average life(1)

3.92 - 6.30 years

 

 

3.50 years

 

 

3.50 years

 

Expected volatility(2)

 

56

%

 

50 – 55%

 

 

 

45

%

Risk-free interest rate(3)

3.78 - 4.25%

 

 

0.32 – 0.43%

 

 

 

0.25

%

Expected dividend yield(4)

 

0.00

%

 

 

0.00

%

 

 

0.00

%
(1)
The expected life assumption is based on the Company's expectation for the period before exercise.
(2)
The expected volatility assumption is developed using leverage-adjusted historical volatilities for public peer companies for the period equal to the expected life of the awards.
(3)
The risk-free rate is based on the bootstrap adjusted US Treasury Rate Yield Curve Rate as of the valuation date, term matched with expected life of the awards.
The expected dividend yield is 0.0% since the Company does not expect to pay dividends.
SARS [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Summary of Stock Option Activity

The following table shows a summary of all SARs granted under the 2020 Plan:

 

 

Number of Shares

 

 

Weighted Average Exercise Price Per Share(1)

 

 

Weighted Average Remaining Contractual Term

 

 

Aggregate Intrinsic Value

 

Outstanding as of January 3, 2021

 

5,536,998

 

 

$

10.52

 

 

 

9.65

 

 

 

 

Granted

 

1,687,632

 

 

 

11.45

 

 

 

 

 

 

 

Forfeited (pre-IPO conversion)

 

(97,384

)

 

 

10.86

 

 

 

 

 

 

 

Exercised

 

—

 

 

 

—

 

 

 

 

 

 

 

Converted (IPO conversion)

 

(1,103,877

)

 

 

 

 

 

 

 

 

 

Forfeited (post-IPO conversion)

 

(182,886

)

 

 

12.63

 

 

 

 

 

 

 

Outstanding as of January 2, 2022

 

5,840,483

 

 

$

12.72

 

 

 

8.61

 

 

$

1,733,089

 

Exercisable as of January 2, 2022

 

2,808,660

 

 

 

12.72

 

 

 

8.40

 

 

 

864,610

 

Vested and expected to vest as of January 2, 2022

 

5,840,483

 

 

$

12.72

 

 

 

8.61

 

 

$

1,733,089

 

Granted

 

—

 

 

 

—

 

 

 

 

 

 

 

Forfeited (post-IPO conversion)

 

(549,764

)

 

 

12.60

 

 

 

 

 

 

 

Exercised

 

—

 

 

 

—

 

 

 

 

 

 

 

Outstanding as of January 1, 2023

 

5,290,719

 

 

$

7.49

 

 

 

5.66

 

 

$

-

 

Exercisable as of January 1, 2023

 

4,246,017

 

 

 

7.49

 

 

 

5.13

 

 

 

-

 

Vested and expected to vest as of January 1, 2023

 

5,290,719

 

 

$

7.49

 

 

 

5.66

 

 

$

-

 

(1) In December 2022, the Company modified the exercise prices for certain outstanding SAR awards to be $4.00 per share. This contributed to the reduction in the weighted average exercise price per share to $7.49.
Restricted Stock [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Summary Of All Restricted Stock Awards

The following table shows a summary of all restricted stock awards (previously granted as Growth Shares) granted under the 2020 Plan:

 

 

Number of Shares

 

 

Weighted Average Grant Date Fair Value

 

Nonvested as of January 3, 2021

 

2,850,897

 

 

$

3.46

 

Vested and not yet released as of January 3, 2021

 

—

 

 

 

 

Outstanding as of January 3, 2021

 

2,850,897

 

 

$

3.46

 

Granted

 

—

 

 

 

—

 

Converted

 

(2,069,166

)

 

 

—

 

Vested

 

(390,866

)

 

 

13.28

 

Forfeited

 

—

 

 

 

—

 

Nonvested as of January 2, 2022

 

390,865

 

 

$

13.28

 

Vested and not yet released as of January 2, 2022

 

390,866

 

 

 

13.28

 

Outstanding as of January 2, 2022

 

781,731

 

 

$

13.28

 

Granted

 

—

 

 

 

—

 

Vested

 

(260,577

)

 

 

11.26

 

Forfeited

 

—

 

 

 

—

 

Nonvested as of January 1, 2023

 

130,288

 

 

$

13.28

 

Vested and not yet released as of January 1, 2023

 

16,286

 

 

 

5.19

 

Outstanding as of January 1, 2023

 

146,574

 

 

$

12.38

 
Restricted Stock Units (RSUs) [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Summary Of All RSUs Granted

The following table shows a summary of all RSUs granted under the 2021 Plan:

 

 

Number of Shares

 

 

Weighted Average Grant Date Fair Value(1)

 

Nonvested as of January 3, 2021

 

—

 

 

$

—

 

Granted

 

2,622,877

 

 

 

10.98

 

Vested

 

—

 

 

 

—

 

Forfeited

 

—

 

 

 

—

 

Nonvested as of January 2, 2022

 

2,622,877

 

 

$

10.98

 

Vested and not yet released as of January 2, 2022

 

—

 

 

 

—

 

Outstanding as of January 2, 2022

 

2,622,877

 

 

$

10.98

 

Granted

 

1,535,975

 

 

 

4.79

 

Vested

 

(1,975,679

)

 

 

8.11

 

Forfeited

 

—

 

 

 

—

 

Nonvested as of January 1, 2023

 

2,183,173

 

 

$

8.44

 

Vested and not yet released as of January 1, 2023

 

815,692

 

 

 

4.76

 

Outstanding as of January 1, 2023

 

2,998,865

 

 

$

7.44

 
v3.22.4
Loss Per Share and Shareholders' Equity (Deficit) (Tables)
 12 Months Ended
Jan. 01, 2023
Stockholders' Equity Note [Abstract]  
Schedule of Changes in each Class of Redeemable Preferred Shares, Ordinary Shares and Common Stock

The table below presents changes in each class of the Company’s redeemable preferred shares, ordinary shares and common stock, as applicable:

 

 

 

 

 

 

 

 

SHHL Ordinary Shares

 

 

 

MCG Common Stock

 

 

SHHL Redeemable Preferred Shares

 

SHHL Redeemable C Ordinary Shares

 

 

 

A
Ordinary
Shares

 

B
Ordinary
Shares

 

C
Ordinary
Shares

 

C2
Ordinary
Shares

 

D
Ordinary
Shares

 

 

 

Class A Common Stock

 

Class B Common Stock

 

As of December 29, 2019

 

10,000,000

 

 

6,933,004

 

 

 

 

166,110,113

 

 

4,469,417

 

 

—

 

 

3,326,048

 

 

—

 

 

 

 

—

 

 

—

 

Conversion of related party loan to SHHL A ordinary shares (Note 12)

 

—

 

 

—

 

 

 

 

2,176,424

 

 

—

 

 

—

 

 

—

 

 

—

 

 

 

 

—

 

 

—

 

Issuance of SHHL redeemable C ordinary shares (Note 16)

 

—

 

 

9,502,993

 

 

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

 

 

—

 

 

—

 

Conversion of SHHL A ordinary shares into SHHL C ordinary shares (Note 16)

 

—

 

 

—

 

 

 

 

(1,710,546

)

 

—

 

 

1,710,546

 

 

—

 

 

—

 

 

 

 

—

 

 

—

 

Issuance of SHHL Growth Shares under the 2020 Plan (Note 14)

 

—

 

 

—

 

 

 

 

—

 

 

—

 

 

—

 

 

—

 

 

2,850,897

 

 

 

 

—

 

 

—

 

As of January 3, 2021

 

10,000,000

 

 

16,435,997

 

 

 

 

166,575,991

 

 

4,469,417

 

 

1,710,546

 

 

3,326,048

 

 

2,850,897

 

 

 

 

—

 

 

—

 

Issuance of senior convertible preference shares (Note 15)

 

12,970,766

 

 

—

 

 

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

 

 

—

 

 

—

 

Issuance of SHHL redeemable C ordinary shares (Note 16)

 

—

 

 

4,751,497

 

 

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

 

 

—

 

 

—

 

SHHL C2 ordinary shares issued in connection with the Cipura Acquisition (Note 3)

 

—

 

 

—

 

 

 

 

—

 

 

—

 

 

—

 

 

644,828

 

 

—

 

 

 

 

—

 

 

—

 

SHHL C2 ordinary shares issued in connection with the Mandolin Acquisition (Note 3)

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

92,647

 

 

—

 

 

—

 

 

—

 

 

—

 

SHHL C2 ordinary shares issued in connection with the purchase of Soho Works North America noncontrolling interests (Note 3)

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

3,984,883

 

 

—

 

 

—

 

 

—

 

 

—

 

SHHL C2 ordinary shares issued in connection with the purchase of Scorpios noncontrolling interests (Note 3)

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

572,410

 

 

—

 

 

—

 

 

—

 

 

—

 

SHHL C2 ordinary shares issued in connection with the LINE and Saguaro Acquisition (Note 3)

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

1,900,599

 

 

—

 

 

—

 

 

—

 

 

—

 

Effect of the Reorganization Transactions (Note 1)

 

—

 

 

(21,187,494

)

 

 

 

(166,575,991

)

 

(4,469,417

)

 

(1,710,546

)

 

(10,521,415

)

 

(2,850,897

)

 

 

 

14,935,193

 

 

141,500,385

 

Issuance of common stock in connection with initial public offering (Note 1)

 

—

 

 

—

 

 

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

 

 

30,567,918

 

 

—

 

Redemption of the May 2016 preferred shares (Note 15)

 

(10,000,000

)

 

—

 

 

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

 

 

—

 

 

—

 

Conversion of senior convertible preference shares into Class A common stock (Note 15)

 

(12,970,766

)

 

—

 

 

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

 

 

15,526,619

 

 

—

 

As of January 2, 2022

 

—

 

 

—

 

 

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

 

 

61,029,730

 

 

141,500,385

 

 

 

 

MCG Common Stock

 

 

 

Class A
Common Stock

 

Class B
Common Stock

 

As of January 2, 2022

 

 

61,029,730

 

 

141,500,385

 

Shares repurchased

 

 

(8,467,120

)

 

—

 

RSUs vested (Note 14)

 

 

1,159,987

 

 

—

 

As of January 1, 2023

 

 

53,722,597

 

 

141,500,385

 
Schedule of Reconciliation of the Loss and Number of Shares Basic and Diluted Loss Per Shares

The table below illustrates the reconciliation of the loss and the number of shares used in the calculations of basic and diluted loss per share:

 

 

 

For the Fiscal Year Ended

 

(in thousands except share and per share amounts)

 

January 1, 2023

 

 

January 2, 2022

 

 

January 3, 2021

 

Net loss attributable to Membership Collective Group Inc.

 

$

(220,580

)

 

$

(265,395

)

 

$

(228,461

)

Less: Cumulative SHHL preferred shares undeclared dividends

 

 

—

 

 

 

(4,778

)

 

 

(4,250

)

Less: Incremental accretion of SHHL preferred shares to
redemption value

 

 

—

 

 

 

(1,085

)

 

 

—

 

Add: Foreign currency remeasurement of SHHL preferred shares

 

 

—

 

 

 

666

 

 

 

—

 

Less: Non-cash dividends on the SHHL senior convertible preference shares

 

 

—

 

 

 

(4,335

)

 

 

—

 

Less: Preferred Shares deemed dividend upon conversion

 

 

—

 

 

 

(51,469

)

 

 

—

 

Adjusted net loss attributable to Class A and Class B common stockholders

 

 

(220,580

)

 

 

(326,396

)

 

 

(232,711

)

Weighted average shares outstanding for basic and diluted loss per share for Class A and Class B common stockholders

 

 

199,985,264

 

 

 

173,691,203

 

 

 

141,896,349

 

Basic and diluted loss per share

 

$

(1.10

)

 

$

(1.88

)

 

$

(1.64

)

 
v3.22.4
Income Taxes (Tables)
 12 Months Ended
Jan. 01, 2023
Income Tax Disclosure [Abstract]  
Schedule of Components of Loss Before Income Taxes

Below are the components of loss before income taxes for the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021 under the following tax jurisdictions:

 

 

For the Fiscal Year Ended

 

(in thousands)

January 1, 2023

 

 

January 2, 2022

 

 

January 3, 2021

 

Domestic⁽¹⁾

$

1,734

 

 

$

(45,312

)

 

$

(137,120

)

Foreign⁽¹⁾

 

(216,383

)

 

 

(222,508

)

 

 

(98,931

)

 

$

(214,649

)

 

$

(267,820

)

 

$

(236,051

)
(1)
Prior to the Reorganization Transactions, Domestic refers to the UK tax jurisdiction and Foreign refers to all non-UK tax jurisdictions. Following the Reorganization Transactions, Domestic refers to the US tax jurisdiction and Foreign refers to all non-US tax jurisdictions.
Schedule of Provision For Income Taxes

The provision for income taxes is as follows:

 

 

For the Fiscal Year Ended

 

(in thousands)

January 1, 2023

 

 

January 2, 2022

 

 

January 3, 2021

 

Current tax expense

 

 

 

 

 

 

 

 

Domestic⁽¹⁾

$

2,240

 

 

$

—

 

 

$

7

 

Foreign⁽¹⁾

 

2,654

 

 

 

1,167

 

 

 

558

 

Total current

 

4,894

 

 

 

1,167

 

 

 

565

 

Deferred tax expense (benefit)

 

 

 

 

 

 

 

 

Domestic⁽¹⁾

 

690

 

 

 

(891

)

 

 

—

 

Foreign⁽¹⁾

 

(453

)

 

 

618

 

 

 

(1,341

)

Total deferred

 

237

 

 

 

(273

)

 

 

(1,341

)

Total income tax expense (benefit)

$

5,131

 

 

$

894

 

 

$

(776

)

 

 

 

 

 

 

 

 

 

Effective income tax rate

 

(2

%)

 

 

(0

%)

 

 

0

%
(1)
Prior to the Reorganization Transactions, Domestic refers to the UK tax jurisdiction and Foreign refers to all non-UK tax jurisdictions. Following the Reorganization Transactions, Domestic refers to the US tax jurisdiction and Foreign refers to all non-US tax jurisdictions.
Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of the US and UK statutory income tax rate to the consolidated effective income tax rate is as follows:

 

 

For the Fiscal Year Ended

 

 

January 1, 2023

 

 

January 2, 2022

 

 

January 3, 2021

 

Benefit at US (Fiscal 2022 and Fiscal 2021) and UK (Fiscal 2020 statutory income tax rate

 

21

%

 

 

21

%

 

 

19

%

Permanent differences

 

(2

%)

 

 

(3

%)

 

 

0

%

Non deductible expenses

 

0

%

 

 

(3

%)

 

 

0

%

Change in unrecognized tax benefits

 

0

%

 

 

0

%

 

 

0

%

Movement in valuation allowances

 

(9

%)

 

 

(15

%)

 

 

(24

%)

Change in valuation allowance due to remeasurement of deferred taxes

 

0

%

 

 

(7

%)

 

 

0

%

Differences in tax rates in other jurisdictions

 

0

%

 

 

0

%

 

 

1

%

Change in tax rates

 

0

%

 

 

7

%

 

 

1

%

Loss of tax attributes

 

(13

%)

 

 

0

%

 

 

0

%

Other

 

1

%

 

 

0

%

 

 

3

%

Effective income tax rate

 

(2

%)

 

 

(0

%)

 

 

0

%
Schedule of Deferred Tax Assets and Liabilities

Deferred tax assets and liabilities consist of the following:

 

 

As of

 

(in thousands)

January 1, 2023

 

 

January 2, 2022

 

Deferred tax assets

 

 

 

 

 

Property and equipment, net

$

26,858

 

 

$

24,591

 

Other short term differences

 

54,497

 

 

 

17,483

 

Lease liability

 

304,717

 

 

 

229,350

 

Interest limitation carryforward

 

66,866

 

 

 

73,422

 

Tax losses

 

110,201

 

 

 

118,890

 

Total gross deferred tax assets

 

563,139

 

 

 

463,736

 

Valuation allowance

 

(216,114

)

 

 

(174,265

)

Total deferred tax assets

$

347,025

 

 

$

289,471

 

Deferred tax liabilities

 

 

 

 

 

Property and equipment, net

$

(23,357

)

 

$

(38,373

)

Intangible assets

 

(13,093

)

 

 

(17,422

)

Right of use asset

 

(310,956

)

 

 

(232,822

)

Other

 

(990

)

 

 

(2,264

)

Total gross deferred tax liabilities

 

(348,396

)

 

 

(290,881

)

Total net deferred tax liabilities⁽¹⁾

$

(1,371

)

 

$

(1,410

)
(1)
For US tax purposes, the LINE and Saguaro Acquisition transaction was considered an asset acquisition. Refer to Note 3, Acquisitions, for further information on this transaction.

 

Total net deferred taxes are classified as follows:

 

 

As of

 

(in thousands)

January 1, 2023

 

 

January 2, 2022

 

Non-current deferred tax assets

$

295

 

 

$

446

 

Non-current deferred tax liabilities

 

(1,666

)

 

 

(1,856

)

 

$

(1,371

)

 

$

(1,410

)
Schedule of Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

 

(in thousands)

January 1, 2023

 

 

January 2, 2022

 

 

January 3, 2021

 

Balance at beginning of year

$

15,129

 

 

$

11,293

 

 

$

9,221

 

Additions related to the current year

 

5,359

 

 

 

3,948

 

 

 

1,996

 

Reductions due to expiry of state of limitations

 

(3,014

)

 

 

(3,822

)

 

 

(1,356

)

Change in tax rate

 

—

 

 

 

3,566

 

 

 

1,478

 

Foreign exchange

 

(1,633

)

 

 

144

 

 

 

(46

)

Balance at end of year

$

15,841

 

 

$

15,129

 

 

$

11,293

 
v3.22.4
Segments (Tables)
 12 Months Ended
Jan. 01, 2023
Segment Reporting [Abstract]  
Summary of disaggregated revenue

The following tables present disaggregated revenue for the fiscal years ended January 1, 2023, January 2, 2022, and January 3, 2021 and the key financial metrics reviewed by the CODM for the Company’s reportable segments:

 

 

 

For the Fiscal Year Ended January 1, 2023

 

(in thousands)

 

North
America

 

 

UK

 

 

Europe
& ROW

 

 

Reportable
Segment
Total

 

 

All
Other

 

 

Total

 

Membership revenues

 

$

139,636

 

 

$

76,603

 

 

$

31,485

 

 

$

247,724

 

 

$

35,955

 

 

$

283,679

 

In-House revenues

 

 

193,749

 

 

 

166,016

 

 

 

87,866

 

 

 

447,631

 

 

 

—

 

 

 

447,631

 

Other revenues

 

 

70,658

 

 

 

65,010

 

 

 

38,408

 

 

 

174,076

 

 

 

112,102

 

 

 

286,178

 

Total segment revenue

 

 

404,043

 

 

 

307,629

 

 

 

157,759

 

 

 

869,431

 

 

 

148,057

 

 

 

1,017,488

 

Elimination of equity accounted revenue

 

 

(14,919

)

 

 

(7,700

)

 

 

(22,655

)

 

 

(45,274

)

 

 

—

 

 

 

(45,274

)

Consolidated revenue

 

$

389,124

 

 

$

299,929

 

 

$

135,104

 

 

$

824,157

 

 

$

148,057

 

 

$

972,214

 

 

 

 

 

For the Fiscal Year Ended January 2, 2022

 

(in thousands)

 

North
America

 

 

UK

 

 

Europe &
ROW

 

 

Reportable
Segment
Total

 

 

All
Other

 

 

Total

 

Membership revenues

 

$

94,746

 

 

$

59,722

 

 

$

22,074

 

 

$

176,542

 

 

$

21,539

 

 

$

198,081

 

In-House revenues

 

 

103,289

 

 

 

88,987

 

 

 

35,567

 

 

 

227,843

 

 

 

—

 

 

 

227,843

 

Other revenues

 

 

42,111

 

 

 

30,878

 

 

 

22,778

 

 

 

95,767

 

 

 

70,885

 

 

 

166,652

 

Total segment revenue

 

 

240,146

 

 

 

179,587

 

 

 

80,419

 

 

 

500,152

 

 

 

92,424

 

 

 

592,576

 

Elimination of equity accounted revenue

 

 

(13,438

)

 

 

(6,088

)

 

 

(12,496

)

 

 

(32,022

)

 

 

—

 

 

 

(32,022

)

Consolidated revenue

 

$

226,708

 

 

$

173,499

 

 

$

67,923

 

 

$

468,130

 

 

$

92,424

 

 

$

560,554

 

 

 

 

For the Fiscal Year Ended January 3, 2021

 

(in thousands)

 

North
America

 

 

UK

 

 

Europe &
RoW

 

 

Reportable
Segment
Total

 

 

All
Other

 

 

Total

 

Membership revenues

 

$

98,478

 

 

$

54,765

 

 

$

22,884

 

 

$

176,127

 

 

$

10,595

 

 

$

186,722

 

In-House revenues

 

 

50,684

 

 

 

53,563

 

 

 

28,904

 

 

 

133,151

 

 

 

—

 

 

 

133,151

 

Other revenues

 

 

23,869

 

 

 

20,918

 

 

 

6,282

 

 

 

51,069

 

 

 

43,981

 

 

 

95,050

 

Total segment revenue

 

 

173,031

 

 

 

129,246

 

 

 

58,070

 

 

 

360,347

 

 

 

54,576

 

 

 

414,923

 

Elimination of equity accounted revenue

 

 

(16,783

)

 

 

(3,140

)

 

 

(10,624

)

 

 

(30,547

)

 

 

—

 

 

 

(30,547

)

Consolidated revenue

 

$

156,248

 

 

$

126,106

 

 

$

47,446

 

 

$

329,800

 

 

$

54,576

 

 

$

384,376

 

 

 

 

 

 
Summary of reconciliation of reportable segment adjusted EBITDA to total consolidated segment revenue

The following tables present the reconciliation of reportable segment adjusted EBITDA to total consolidated segment revenue and the reconciliation of net loss to adjusted EBITDA:

 

 

 

For the Fiscal Year Ended January 1, 2023

 

(in thousands)

 

North
America

 

 

UK

 

 

Europe &
ROW

 

 

Reportable
Segment
Total

 

 

All
Other

 

 

Total

 

Total consolidated segment revenue

 

$

389,124

 

 

$

299,929

 

 

$

135,104

 

 

$

824,157

 

 

$

148,057

 

 

$

972,214

 

Total segment operating expenses

 

 

(318,375

)

 

 

(238,733

)

 

 

(127,702

)

 

 

(684,810

)

 

 

(161,582

)

 

 

(846,392

)

Share of equity method investments adjusted EBITDA

 

 

2,610

 

 

 

1,142

 

 

 

3,825

 

 

 

7,577

 

 

 

—

 

 

 

7,577

 

Reportable segments adjusted EBITDA

 

 

73,359

 

 

 

62,338

 

 

 

11,227

 

 

 

146,924

 

 

 

(13,525

)

 

 

133,399

 

Unallocated corporate overhead

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(43,522

)

Consolidated adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

89,877

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(99,930

)

Interest expense, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(71,499

)

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,131

)

Gain on sale of property and other, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

390

 

Share of income of equity method investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,941

 

Foreign exchange

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(69,600

)

Pre-opening expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(14,081

)

Non-cash rent(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,877

)

Deferred registration fees, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(924

)

Share of equity method investments adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,577

)

Share-based compensation expense(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(22,675

)

Other expenses, net(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(14,694

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(219,780

)
(1)
Includes the effect of a prior-period error correction, as discussed in Note 2, Summary of Significant Accounting Policies – Basis of Presentation.
(2)
Other expenses, net includes share-based compensation and severance expense incurred related to the departure of the former Chief Operating Officer ($4 million) and another former employee ($1 million) of the Company of $5 million for fiscal year ended January 1, 2023. This balance is reported within Share-based compensation expense in the consolidated statement of operations for the fiscal year ended January 1, 2023.

 

 

 

For the Fiscal Year Ended January 2, 2022

 

(in thousands)

 

North
America

 

 

UK

 

 

Europe &
ROW

 

 

Reportable
Segment
Total

 

 

All
Other

 

 

Total

 

Total consolidated segment revenue

 

$

226,708

 

 

$

173,499

 

 

$

67,923

 

 

$

468,130

 

 

$

92,424

 

 

$

560,554

 

Total segment operating expenses

 

 

(183,051

)

 

 

(145,293

)

 

 

(64,686

)

 

 

(393,030

)

 

 

(114,705

)

 

 

(507,735

)

Share of equity method investments adjusted EBITDA

 

 

2,289

 

 

 

760

 

 

 

1,613

 

 

 

4,662

 

 

 

-

 

 

 

4,662

 

Reportable segments adjusted EBITDA

 

 

45,946

 

 

 

28,966

 

 

 

4,850

 

 

 

79,762

 

 

 

(22,281

)

 

 

57,481

 

Unallocated corporate overhead

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(40,741

)

Consolidated adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16,740

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(83,613

)

Interest expense, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(84,382

)

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(894

)

Gain on sale of property and other, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,837

 

Share of loss of equity method investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,249

)

Foreign exchange (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(25,541

)

Pre-opening expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(21,294

)

Non-cash rent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(12,651

)

Deferred registration fees, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,463

)

Share of equity method investments adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,662

)

Share-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(26,660

)

Other expenses, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(25,882

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(268,714

)
(1)
Includes the effect of a prior-period error correction, as discussed in Note 2, Summary of Significant Accounting Policies – Basis of Presentation.

 

 

 

For the Fiscal Year Ended January 3, 2021

 

(in thousands)

 

North
America

 

 

UK

 

 

Europe &
RoW

 

 

Reportable
Segment
Total

 

 

All
Other

 

 

Total

 

Total consolidated segment revenue

 

$

156,248

 

 

$

126,106

 

 

$

47,446

 

 

$

329,800

 

 

$

54,576

 

 

$

384,376

 

Total segment operating expenses

 

 

(131,444

)

 

 

(112,862

)

 

 

(50,677

)

 

 

(294,983

)

 

 

(61,519

)

 

 

(356,502

)

Share of equity method investments adjusted EBITDA

 

 

2,647

 

 

 

132

 

 

 

784

 

 

 

3,563

 

 

 

-

 

 

 

3,563

 

Reportable segments adjusted EBITDA

 

 

27,451

 

 

 

13,376

 

 

 

(2,447

)

 

 

38,380

 

 

 

(6,943

)

 

 

31,437

 

Unallocated corporate overhead

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(31,211

)

Consolidated adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

226

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(69,802

)

Interest expense, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(77,792

)

Income tax benefit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

776

 

Gain on sale of property and other, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

98

 

Share of loss of equity method investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,627

)

Foreign exchange

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,354

 

Pre-opening expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(21,058

)

Non-cash rent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(15,627

)

Deferred registration fees, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,149

)

Share of equity method investments adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,563

)

Share-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,618

)

Other expenses, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(44,493

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(235,275

)

 

 

 

For the Fiscal Year Ended

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022

 

 

January 3, 2021

 

Net loss

 

$

(219,780

)

 

$

(268,714

)

 

$

(235,275

)

Depreciation and amortization

 

 

99,930

 

 

 

83,613

 

 

 

69,802

 

Interest expense, net

 

 

71,499

 

 

 

84,382

 

 

 

77,792

 

Income tax expense (benefit)

 

 

5,131

 

 

 

894

 

 

 

(776

)

EBITDA

 

 

(43,220

)

 

 

(99,825

)

 

 

(88,457

)

Gain on sale of property and other, net

 

 

(390

)

 

 

(6,837

)

 

 

(98

)

Share of (income) loss of equity method investments

 

 

(3,941

)

 

 

2,249

 

 

 

3,627

 

Foreign exchange

 

 

69,600

 

 

 

25,541

 

 

 

(3,354

)

Pre-opening expenses(1)

 

 

14,081

 

 

 

21,294

 

 

 

21,058

 

Non-cash rent(2)

 

 

7,877

 

 

 

12,651

 

 

 

15,627

 

Deferred registration fees, net

 

 

924

 

 

 

4,463

 

 

 

1,149

 

Share of equity method investments adjusted EBITDA

 

 

7,577

 

 

 

4,662

 

 

 

3,563

 

Share-based compensation expense(3)

 

 

22,675

 

 

 

26,660

 

 

 

2,618

 

Other expenses, net(3)(4)

 

 

14,694

 

 

 

25,882

 

 

 

44,493

 

Adjusted EBITDA

 

$

89,877

 

 

$

16,740

 

 

$

226

 
(1)
The entire balance of these costs is related to pre-opening activities for our Houses in each of the periods presented.
(2)
The non-cash rent balance for the fiscal year ended January 1, 2023 includes the effect of a prior-period error correction, as discussed in Note 2, Summary of Significant Accounting Policies – Basis of Presentation.
(3)
Other expenses, net includes share-based compensation and severance expense incurred related to the departure of the former Chief Operating Officer ($4 million) of the Company and former employee ($1 million) of $5 million for fiscal year ended January 1, 2023. This balance is reported within Share-based compensation expense in the consolidated statement of operations for the fiscal year ended January 1, 2023.

 

(4)
Represents other items included in operating expenses, which are outside the normal scope of the Company’s ordinary activities or non-cash, including expenses incurred in respect of membership credits of $1 million and $8 million for the fiscal years ended January 1, 2023 and January 2, 2022, respectively. Other expenses, net also include IPO-related costs of $14 million and corporate financing and restructuring costs of $2 million incurred during the fiscal year ended January 2, 2022. For the fiscal year ended January 3, 2021, other expenses, net include COVID-19 related charges of $5 million, abandoned project costs of $7 million, corporate restructuring costs of $6 million, and the Soho Restaurants guarantee provision of $5 million (refer to Note 4, Consolidated Variable Interest Entities).
Summary of long-lived asset information by geographic area

The following table presents long-lived asset information (which includes property and equipment, net, operating lease right-of-use assets and equity method investments) by geographic area as of January 1, 2023 and January 2, 2022. Asset information by segment is not reported internally or otherwise regularly reviewed by the CODM.

 

 

 

As of

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022

 

Long-lived assets by geography

 

 

 

 

 

 

North America

 

$

901,505

 

 

$

806,617

 

United Kingdom

 

 

509,221

 

 

 

571,716

 

Europe

 

 

297,247

 

 

 

270,657

 

Asia

 

 

46,236

 

 

 

56,583

 

Total long-lived assets

 

$

1,754,209

 

 

$

1,705,573

 

 
v3.22.4
Related Party Transactions (Tables)
 12 Months Ended
Jan. 01, 2023
Related Party Transactions [Abstract]  
Summary of details amounts owed by (to) equity method investees due within one year are as follows

The amounts owed by (to) equity method investees due within one year are as follows:

 

 

 

As of

 

(in thousands)

 

January 1, 2023

 

 

January 2, 2022

 

Soho House Toronto Partnership

 

$

1,015

 

 

$

(810

)

Raycliff Red LLP

 

 

(4,169

)

 

 

(2,952

)

Mirador Barcel S.L.

 

 

(499

)

 

 

450

 

Little Beach House Barcelona S.L.

 

 

(313

)

 

 

(203

)

Mimea XXI S.L.

 

 

477

 

 

 

429

 

 

 

$

(3,489

)

 

$

(3,086

)
v3.22.4
Nature of the Business - Additional Information (Detail) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Jul. 19, 2021
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Business Acquisition [Line Items]        
Repayments of Debt   $ 736 $ 613,984 $ 819
SHHL [Member] | Common Class B [Member]        
Business Acquisition [Line Items]        
Stock Issued During Period, Shares, Conversion of Units 141,500,385      
SHHL [Member] | Common Class A [Member]        
Business Acquisition [Line Items]        
Stock Issued During Period, Shares, Conversion of Units 14,935,193      
SHHL [Member] | Senior Convertible Preference Shares [Member]        
Business Acquisition [Line Items]        
Stock Issued During Period, Shares, Conversion of Units 15,526,619      
IPO [Member] | Common Class A [Member]        
Business Acquisition [Line Items]        
Stock shares issued during the period shares 30,567,918      
Share Price $ 14.00      
Exercised 567,918      
v3.22.4
Summary of Significant Accounting Policies- Additional Information (Detail)
£ in Millions
 1 Months Ended 12 Months Ended
Mar. 09, 2022
USD ($)
Jan. 31, 2012
Jan. 01, 2023
USD ($)
Customer
Jan. 02, 2022
USD ($)
Jan. 01, 2022
USD ($)
Jan. 03, 2021
USD ($)
Mar. 09, 2022
GBP (£)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]              
Payment terms     60 days        
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life     17 years        
Other comprehensive income foreign currency translation gain adjustment, Net of tax     $ 47,480,000 $ 20,185,000   $ (13,161,000)  
Foreign exchange loss (gain), net     69,600,000 25,541,000 [1]   (3,354,000)  
Net loss     (219,780,000) (268,714,000)   (235,275,000)  
Operating lease assets     1,085,579,000 996,991,000      
Operating lease, liability     1,249,076,000        
Cash flow from operation     14,682,000 (127,419,000)   (38,229,000)  
Accumulated deficit     (1,242,412,000) (1,021,832,000)      
Cash and cash equivalents at carrying value     182,115,000 212,833,000   52,887,000  
Restricted cash     $ 7,928,000 7,829,000   7,083,000  
Cash flow forecast, period     12 months        
Shares issued during period, temporary equity     $ 0 0   0  
Allowance for doubtful accounts     4,000,000 3,000,000      
Direct and incremental legal and accounting costs     1,000,000 40,000,000      
Offering cost       14,000,000      
Advertising Costs     7,000,000 6,000,000   4,000,000  
Raw materials and service stock and supplies     19,000,000 8,000,000      
Finished goods     39,000,000 22,000,000      
Unusable Inventory     1,000,000 0      
Total capitalized interest     0 0   0  
Impairment of Property and Equipment     0 0   1,000,000  
Impairment losses Intangible Assets with Finite Useful Lives     0 0   0  
Goodwill Impairment Loss       0   0  
Accounts Payable Related To Deferred Lease Payments     1,000,000 12,000,000      
Other expenses net related to segments         $ 4,000    
Debt issuance costs     10,000,000        
Amortization of debt issuance costs     $ 4,315,000 4,632,000   5,779,000  
Estimated Average Membership Life     20 years        
Recognition of revenue     $ 2,000,000 2,000,000   1,000,000  
Deferred Revenue, Current     2,000,000 2,000,000      
Deferred Revenue Noncurrent     27,000,000 28,000,000      
Advance deposits     12,000,000 9,000,000      
Revenue recognized from Soho House Design     $ 22,000,000 $ 13,000,000   14,000,000  
Revenues relating contracts from unaffiliated third parties, Percentage     43.00% 7.00%      
Government Grants     $ 5,000,000        
Operating Expenses     1,119,695,000 $ 748,580,000   539,106,000  
Obligation settled amount         $ 1,000    
Other Operating Expense     250,336,000 167,152,000   109,251,000  
General and Administrative Expense     123,435,000 89,383,000   74,954,000  
Other Expense [Member]              
New Accounting Pronouncements or Change in Accounting Principle [Line Items]              
Government Grants       21,000,000      
Operating Expenses     5,000,000 17,000,000      
Other Operating Expense     1,000 3,000      
General and Administrative Expense       1,000      
Prepaid Expenses and Other Current Assets [Member]              
New Accounting Pronouncements or Change in Accounting Principle [Line Items]              
Debt issuance costs       1,000,000      
Secured Debt [Member]              
New Accounting Pronouncements or Change in Accounting Principle [Line Items]              
Debt issuance costs     1,000,000 $ 12,000,000      
Secured Debt [Member] | Maximum [Member]              
New Accounting Pronouncements or Change in Accounting Principle [Line Items]              
Debt issuance costs     $ 13,000,000        
Revolving Credit Facility [Member]              
New Accounting Pronouncements or Change in Accounting Principle [Line Items]              
Line of Credit Facility, Current Borrowing Capacity $ 86,000,000           £ 71
Additional Notes [Member] | Secured Debt [Member]              
New Accounting Pronouncements or Change in Accounting Principle [Line Items]              
Stock Issued During Period, Value, Stock Options Exercised $ 100,000,000            
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Trade Receivables [Member]              
New Accounting Pronouncements or Change in Accounting Principle [Line Items]              
Number Of Customers | Customer     0        
Customer One [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member]              
New Accounting Pronouncements or Change in Accounting Principle [Line Items]              
Concentration risk percentage       16.00%      
Customer Two [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member]              
New Accounting Pronouncements or Change in Accounting Principle [Line Items]              
Concentration risk percentage       10.00%      
Ownership [Member] | Equity Method Investments [Member] | Maximum [Member]              
New Accounting Pronouncements or Change in Accounting Principle [Line Items]              
Voting equity securities, percentage     50.00%        
Ownership [Member] | Equity Method Investments [Member] | Minimum [Member]              
New Accounting Pronouncements or Change in Accounting Principle [Line Items]              
Voting equity securities, percentage     20.00%        
Yucaipa Companies LLC [Member]              
New Accounting Pronouncements or Change in Accounting Principle [Line Items]              
Percentage equity interests outstanding   58.90%          
Operating lease assets     $ 17,000,000 $ 11,000,000      
Operating lease, liability     21,000,000     17,000,000  
Previously Reported [Member]              
New Accounting Pronouncements or Change in Accounting Principle [Line Items]              
Net loss     220,000,000        
Operating lease assets       5,000,000   13,000,000  
Operating lease, liability       10,000,000   18,000,000  
Operating lease expenes       5,000,000   $ 5,000,000  
Cash flow from operation     15,000,000        
Accumulated deficit     1,242,000,000        
Cash and cash equivalents at carrying value     182,000,000        
Restricted cash     $ 8,000,000        
Restatement Adjustment [Member]              
New Accounting Pronouncements or Change in Accounting Principle [Line Items]              
Operating lease assets       5,000,000      
Operating lease, liability       $ 10,000,000      
[1] Includes the effect of a prior-period error correction, as discussed in Note 2, Summary of Significant Accounting Policies – Basis of Presentation.
v3.22.4
Summary of Significant Accounting Policies - Summary Of Restricted Cash And Cash Equivalents (Details) - USD ($)
$ in Thousands
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Dec. 29, 2019
Accounting Policies [Abstract]        
Cash and Cash Equivalents, at Carrying Value $ 182,115 $ 212,833 $ 52,887  
Restricted Cash, Current 7,928 7,829 7,083  
Total cash, cash equivalents, and restricted cash shown on the consolidated statement of cash flows $ 190,043 $ 220,662 $ 59,970 $ 56,315
v3.22.4
Summary of Significant Accounting Policies - Schedule of Estimated Useful Lives of Property Plant and Equipment (Details)
 12 Months Ended
Jan. 01, 2023
Buildings [Member] | Maximum [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful life 100 years
Buildings [Member] | Minimum [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful life 50 years
Leasehold Improvements [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful life Lesser of useful life or remaining lease term
Fixtures and Fittings [Member] | Maximum [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful life 5 years
Fixtures and Fittings [Member] | Minimum [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful life 2 years
Office Equipment and Other [Member] | Maximum [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful life 4 years
Office Equipment and Other [Member] | Minimum [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful life 2 years
Finance Property Lease [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful life Reasonably assured lease term
v3.22.4
Summary of Significant Accounting Policies - Summary of foreign exchange rates (Details)
Jan. 01, 2023
Rate
Jan. 02, 2022
Rate
Jan. 03, 2021
Rate
Great Britain pound sterling      
Foreign Currency Exchange Rate 121.00% 135.00%  
Foreign Currency Exchange Rate, Remeasurement 123.00% 138.00% 128.00%
Canadian dollar      
Foreign Currency Exchange Rate 74.00% 79.00%  
Foreign Currency Exchange Rate, Remeasurement 77.00% 80.00% 74.00%
Euro      
Foreign Currency Exchange Rate 107.00% 114.00%  
Foreign Currency Exchange Rate, Remeasurement 105.00% 118.00% 114.00%
Hong Kong dollar      
Foreign Currency Exchange Rate 13.00% 13.00%  
Foreign Currency Exchange Rate, Remeasurement 13.00% 13.00% 13.00%
Israeli new shekel      
Foreign Currency Exchange Rate 28.00% 32.00%  
Foreign Currency Exchange Rate, Remeasurement 30.00% 31.00% 29.00%
Danish krone      
Foreign Currency Exchange Rate 14.00%    
Foreign Currency Exchange Rate, Remeasurement 14.00%    
Swedish krona      
Foreign Currency Exchange Rate 10.00%    
Foreign Currency Exchange Rate, Remeasurement 10.00%    
Mexican peso      
Foreign Currency Exchange Rate 5.00%    
Foreign Currency Exchange Rate, Remeasurement 5.00%    
Qatari riyal      
Foreign Currency Exchange Rate 27.00%    
Foreign Currency Exchange Rate, Remeasurement 28.00%    
v3.22.4
Acquisitions - Additional Information (Detail)
$ / shares in Units, $ in Thousands, £ in Millions
 1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Jan. 02, 2022
USD ($)
Jun. 22, 2021
USD ($)
$ / shares
shares
May 12, 2021
USD ($)
$ / shares
shares
May 10, 2021
USD ($)
$ / shares
shares
Apr. 30, 2021
USD ($)
Aug. 31, 2020
USD ($)
Apr. 30, 2019
USD ($)
Oct. 03, 2021
USD ($)
Oct. 03, 2021
USD ($)
Jan. 01, 2023
USD ($)
Jan. 02, 2022
USD ($)
Jan. 03, 2021
USD ($)
Mar. 29, 2022
USD ($)
Mar. 29, 2022
GBP (£)
May 01, 2021
Dec. 29, 2019
USD ($)
Business Acquisition [Line Items]                                
Consolidated revenue                   $ 972,214 $ 560,554 $ 384,376        
Net loss                   (219,780) (268,714) (235,275)        
Cash and cash equivalents $ 212,833                 182,115 212,833 52,887        
Operating lease, right-of-use asset 996,991                 1,085,579 996,991          
Operating lease right-of-use asset and associated lease liability                   133,743 170,105 67,235        
Business combination, Recognized goodwill 214,257                 $ 199,646 214,257 201,482       $ 191,177
Business combination, Recognized intangible assets useful life                   17 years            
Hotel Management Agreements [Member]                                
Business Acquisition [Line Items]                                
Business combination, Recognized intangible assets useful life                   15 years            
General and Administrative Expense [Member]                                
Business Acquisition [Line Items]                                
Provision for loan, lease, and other losses                       $ 5,000        
Soho Restaurants Limited [Member]                                
Business Acquisition [Line Items]                                
Material property, plant and equipment           $ 0                    
Recognized intangible assets           0                    
Cash and cash equivalents           1,000             $ 2,000 £ 1    
Operating lease, right-of-use asset           11,000                    
Non-controlling interest           2,000                    
Noncontrolling deficit                         $ 2,000      
Business combination, Recognized net working capital liabilities           5,000                    
Business combination, Change in fair value of consideration           0                    
Soho Restaurants Limited [Member] | General and Administrative Expense [Member]                                
Business Acquisition [Line Items]                                
Provision for loan, lease, and other losses           $ 5,000                    
Mandolin Acquisition [Member]                                
Business Acquisition [Line Items]                                
Business combination consideration tranferred, Equity interest issued       $ 1,000                        
Business combination consideration tranferred description, Equity interest issued       The fair value of the C2 ordinary shares was derived by using an implied valuation of $13.49, as described above.                        
Share Price | $ / shares       $ 13.49                        
Mandolin Acquisition [Member] | Common Class C Two [Member]                                
Business Acquisition [Line Items]                                
Stock issued during period, Acquisition of Mandolin | shares       92,647                        
Soho Works North America Acquisition [Member]                                
Business Acquisition [Line Items]                                
Business combination consideration tranferred description, Equity interest issued       The fair value of the SHHL C2 ordinary shares was derived by using an implied valuation of $13.49 per share, as described above.                        
Share Price | $ / shares       $ 13.49                        
Business combination, Derecognized non controlling interest       $ 33,000                        
Business combination, Change in fair value of consideration       $ 54,000                        
Soho Works North America Acquisition [Member] | SW SPV LLC [Member]                                
Business Acquisition [Line Items]                                
Percentage of equity interest acquired       30.00%                        
Business combination consideration tranferred, Equity interest issued       $ 54,000                        
Soho Works North America Acquisition [Member] | Common Class C Two [Member] | SW SPV LLC [Member]                                
Business Acquisition [Line Items]                                
Stock issued during period, Acquisition of Soho works | shares       3,984,883                        
Paraga Beach S A [Member]                                
Business Acquisition [Line Items]                                
Percentage of equity interest acquired         12.00%                      
Business combination, Cash consideration paid         $ 9,000                      
Paraga Beach S A [Member] | Seligny Holdings Limited And Jaquelle Limited [Member]                                
Business Acquisition [Line Items]                                
Business combination, Equity interest held in acquiree       10.00%                        
Scorpios Noncontrolling Interests Acquisitions [Member]                                
Business Acquisition [Line Items]                                
Total consideration             $ 52,000                  
Contingent consideration             1,000                  
Cash consideration             $ 51,000                  
Percentage of equity interest acquired     11.00%                          
Business combination consideration tranferred description, Equity interest issued         The fair value of the SHHL C2 ordinary shares was derived by using an implied valuation of $13.49 per share which was supported by recent third-party capital raising transactions that occurred during Fiscal 2021                      
Share Price | $ / shares     $ 13.49                          
Business combination, Recognized goodwill   $ 2,000                            
Business combination, Derecognized non controlling interest     $ 16,000                          
Scorpios Noncontrolling Interests Acquisitions [Member] | Seligny Holdings Limited And Jaquelle Limited [Member]                                
Business Acquisition [Line Items]                                
Business combination consideration tranferred, Equity interest issued     $ 8,000                          
Scorpios Noncontrolling Interests Acquisitions [Member] | Common Class C Two [Member] | Seligny Holdings Limited And Jaquelle Limited [Member]                                
Business Acquisition [Line Items]                                
Stock issued during period, Acquisition of Scorpios non controlling interest | shares     572,410                          
Scorpios Noncontrolling Interests Acquisitions [Member] | Beach Club [Member]                                
Business Acquisition [Line Items]                                
Percentage of equity interest acquired             67.00%                  
Scorpios Noncontrolling Interests Acquisitions [Member] | Hotel [Member]                                
Business Acquisition [Line Items]                                
Percentage of equity interest acquired             75.00%                  
Scorpios Noncontrolling Interests Acquisitions [Member] | Restaurant Under Construction [Member]                                
Business Acquisition [Line Items]                                
Percentage of equity interest acquired             71.00%                  
LINE And Saguaro Acquisition [Member]                                
Business Acquisition [Line Items]                                
Business combination consideration tranferred, Equity interest issued   $ 26,000                            
Business combination consideration tranferred description, Equity interest issued   The fair value of the SHHL C2 ordinary shares was derived by using an implied valuation of $13.49 per share, as described above.                            
Share Price | $ / shares   $ 13.49                            
LINE And Saguaro Acquisition [Member] | Hotel Management Agreements [Member]                                
Business Acquisition [Line Items]                                
Business combination, Recognized intangible assets   $ 24,000                            
Business combination, Recognized intangible assets useful life   15 years                            
LINE And Saguaro Acquisition [Member] | Common Class C Two [Member]                                
Business Acquisition [Line Items]                                
Stock issued during period, Acquisition of Line and saguaro | shares   1,900,599                            
LINE And Saguaro Acquisition [Member] | General and Administrative Expense [Member]                                
Business Acquisition [Line Items]                                
Business combination, Acquisition related costs                     $ 1,000          
Cipura Acquisition [Member]                                
Business Acquisition [Line Items]                                
Percentage of equity interest acquired       50.00%                        
Business combination consideration tranferred, Equity interest issued       $ 9,000                        
Business combination consideration tranferred description, Equity interest issued       The fair value of the SHHL C2 ordinary shares was derived by using an implied valuation of $13.49 per share, as described above.                        
Share Price | $ / shares       $ 13.49                        
Equity method investment, Ownership percentage derecognized               50.00% 50.00%              
Business combination, Recognized cash and cash equivalents       $ 1,000                        
Business combination, Recognized net working capital liabilities       1,000                        
Business combination, Recognized property and equipment       1,000                        
Operating lease right-of-use asset and associated lease liability               $ 1,000                
Business combination, Recognized deferred tax liabilities       1,000                        
Business combination, Recognized right-of-use assets       4,000                        
Business combination, Recognized lease liabilities       5,000                        
Business combination, Recognized goodwill       17,000                        
Business combination, Recognized receivables       $ 2,000                        
Cipura Acquisition [Member] | Maximum [Member]                                
Business Acquisition [Line Items]                                
Increase intangible assets after valuation               1,000 $ 1,000              
Decrease in deferred tax liabilities after valuation               1,000 1,000              
Reduction of goodwill               $ 1,000 1,000              
Cipura Acquisition [Member] | Common Class C Two [Member]                                
Business Acquisition [Line Items]                                
Stock issued during period, Acquisition | shares       644,828                        
Cipura Acquisition [Member] | Trade Names [Member]                                
Business Acquisition [Line Items]                                
Business combination, Recognized intangible assets       $ 3,000                        
Cipura Acquisition [Member] | Gain Loss On Sale Of Property Plant Equipment [Member]                                
Business Acquisition [Line Items]                                
Business combination equity interest in acquiree, Remeasurement gain                 $ 7,000              
Cipura Acquisition [Member] | General and Administrative Expense [Member]                                
Business Acquisition [Line Items]                                
Business combination, Acquisition related costs $ 1,000                              
Cipura Acquisition [Member] | Mandolin Aegean Bistro [Member]                                
Business Acquisition [Line Items]                                
Equity method investment, Ownership percentage                             50.00%  
v3.22.4
Consolidated Variable Interest Entities - Summary of Consolidated VIEs' Assets and Liabilities Included in The Condensed Consolidated Balance Sheets (Detail) - USD ($)
$ in Thousands
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Condensed Balance Sheet Statements, Captions [Line Items]      
Cash and cash equivalents $ 182,115 $ 212,833 $ 52,887
Restricted cash 7,928 7,829 $ 7,083
Accounts receivable 42,215 19,338  
Inventories 57,848 29,697  
Prepaid expenses and other current assets 91,101 57,004  
Total current assets 381,207 326,701  
Property and equipment, net 647,001 684,961  
Operating lease assets 1,085,579 996,991  
Other intangible assets, net 125,968 132,158  
Other non-current assets 6,571 2,348  
Total assets 2,467,896 2,381,483  
Accounts payable 80,741 71,497  
Accrued liabilities 84,112 63,127  
Indirect and employee taxes payable 38,088 25,289  
Other current liabilities 36,019 29,045  
Total current liabilities 395,800 329,763  
Debt, net of current portion 579,904 459,343  
Other non-current liabilities 256 975  
Total liabilities 2,483,272 2,199,291  
Variable Interest Entity, Primary Beneficiary [Member] | Nonrecourse [Member]      
Condensed Balance Sheet Statements, Captions [Line Items]      
Cash and cash equivalents 7,941 2,986  
Accounts receivable 1,823 3,407  
Inventories 19 14  
Prepaid expenses and other current assets 3,283 4,608  
Total current assets 13,066 11,015  
Property and equipment, net 32,288 43,501  
Operating lease assets 99,717 114,522  
Other intangible assets, net 284 160  
Other non-current assets 181 204  
Total assets 145,536 169,402  
Accounts payable 337 1,011  
Accrued liabilities 8,131 8,752  
Indirect and employee taxes payable 1,548 0  
Current portion of debt 24,612 21,092  
Other current liabilities 4,153 2,021  
Total current liabilities 43,143 37,383  
Other non-current liabilities 0 0  
Total liabilities 158,325 171,136  
Net assets (12,789) (1,734)  
Sites Trading Less Than One Year [Member]      
Condensed Balance Sheet Statements, Captions [Line Items]      
Current portion of operating lease liabilities 4,176 842  
Operating lease liabilities, net of current portion 227,158 174,469  
Sites Trading More Than One Year [Member]      
Condensed Balance Sheet Statements, Captions [Line Items]      
Current portion of operating lease liabilities 35,436 34,513  
Operating lease liabilities, net of current portion 982,306 941,861  
Sites Trading More Than One Year [Member] | Variable Interest Entity, Primary Beneficiary [Member] | Nonrecourse [Member]      
Condensed Balance Sheet Statements, Captions [Line Items]      
Current portion of operating lease liabilities 4,362 4,507  
Operating lease liabilities, net of current portion $ 115,182 $ 133,753  
v3.22.4
Consolidated Variable Interest Entities - Additional Information (Detail) - Soho Works Limited [Member]
 12 Months Ended
Sep. 29, 2017
Jan. 01, 2023
Consolidated Variable Interest Entities [Line Items]    
Equity method investment, Ownership percentage 100.00%  
Common stock shares voting rights 50%  
Granted option to subscribe for individuals 30.00%  
Varible interest entity, Size of VIE   The Soho Works Limited (“SWL”) joint venture develops and operates Soho-branded, membership-based co-working spaces, with five sites currently in operation in the UK.
Exercise of Option [Member]    
Consolidated Variable Interest Entities [Line Items]    
Equity method investment, Ownership percentage 70.00%  
v3.22.4
Equity Method Investments - Schedule Of Equity Method Investment Summarized Ownership Interests (Details)
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Soho House Toronto Partnership [Member]      
Schedule of Equity Method Investments [Line Items]      
Equity method investment, Ownership percentage 50.00% 50.00% 50.00%
Soho House Cipura (Miami), LLC [Member]      
Schedule of Equity Method Investments [Line Items]      
Equity method investment, Ownership percentage     50.00%
Ludlow Acquisition LLC [Member]      
Schedule of Equity Method Investments [Line Items]      
Equity method investment, Ownership percentage 33.30% 33.30% 33.30%
Raycliff Red LLP [Member]      
Schedule of Equity Method Investments [Line Items]      
Equity method investment, Ownership percentage 50.00% 50.00% 50.00%
Raycliff Shoreditch Holdings LLP [Member]      
Schedule of Equity Method Investments [Line Items]      
Equity method investment, Ownership percentage 50.00% 50.00% 50.00%
Redchurch Partner Limited [Member]      
Schedule of Equity Method Investments [Line Items]      
Equity method investment, Ownership percentage 50.00% 50.00% 50.00%
Mimea XXI S.L. [Member]      
Schedule of Equity Method Investments [Line Items]      
Equity method investment, Ownership percentage 50.00% 50.00% 50.00%
Mirador Barcel S.L. [Member]      
Schedule of Equity Method Investments [Line Items]      
Equity method investment, Ownership percentage 50.00% 50.00% 50.00%
Little Beach House Barcelona S.L.[Member]      
Schedule of Equity Method Investments [Line Items]      
Equity method investment, Ownership percentage 50.00% 50.00% 50.00%
Soho Beach House Canouan Limited [Member]      
Schedule of Equity Method Investments [Line Items]      
Equity method investment, Ownership percentage 20.00% 20.00%  
v3.22.4
Equity Method Investments - Schedule Of Equity Method Investment Summarized Ownership Interests (Details) (Parenthetical)
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Soho House Toronto Partnership [Member]      
Schedule of Equity Method Investments [Line Items]      
Equity Method Investment, Ownership Percentage 50.00% 50.00% 50.00%
Soho House Cipura (Miami), LLC [Member]      
Schedule of Equity Method Investments [Line Items]      
Percentage of equity interest acquired     50.00%
Soho House Cipura (Miami), LLC [Member] | Soho House Toronto Partnership [Member]      
Schedule of Equity Method Investments [Line Items]      
Equity Method Investment, Ownership Percentage   100.00%  
v3.22.4
Equity Method Investments - Summary of The Company's Maximum Exposure To Losses Related To Its Equity Method Investments (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Shedule Of Equity Method Investment Summarized Statement Of Operations [Line Items]      
Revenues $ 972,214 $ 560,554 $ 384,376
Operating loss (147,481) (188,026) (154,730)
Net loss (219,780) (268,714) (235,275)
Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member]      
Shedule Of Equity Method Investment Summarized Statement Of Operations [Line Items]      
Revenues 45,274 32,022 [1] 30,547
Operating loss 7,131 (4,442) [1] (3,923)
Net loss [2] $ 3,133 $ (5,227) [1] $ (6,737)
[1] Includes the financial information of Cipura through May 10, 2021.
[2] The net income / (loss) shown above relates entirely to continuing operations.
v3.22.4
Equity Method Investments - Summary of Equity Method Investment Summarized Balance Sheet (Detail) - USD ($)
$ in Thousands
Jan. 01, 2023
Jan. 02, 2022
Shedule Of Equity Method Investment Summarized Balance Sheet [Line Items]    
Total current assets $ 381,207 $ 326,701
Non-current assets 2,086,689 2,054,782
Total assets 2,467,896 2,381,483
Total current liabilities 395,800 329,763
Non-current liabilities 2,087,472 1,869,528
Total liabilities 2,483,272 2,199,291
Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member]    
Shedule Of Equity Method Investment Summarized Balance Sheet [Line Items]    
Total current assets 18,916 33,705
Non-current assets 142,324 137,753
Total assets 161,240 171,458
Total current liabilities 8,551 13,976
Non-current liabilities 101,820 121,311
Total liabilities 110,371 135,287
Net assets $ 50,869 $ 36,171
v3.22.4
Equity Method Investments - Additional Information (Detail)
$ / shares in Units, $ in Millions
 12 Months Ended
Jul. 06, 2015
EUR (€)
Jan. 01, 2023
$ / shares
shares
Jan. 02, 2022
USD ($)
Jan. 03, 2021
Jan. 28, 2014
Mar. 28, 2012
Schedule of Equity Method Investments [Line Items]            
Lessee, Operating Lease, Option to Extend   multiple   This lease was extended for an additional 5 years in Fiscal 2021.    
Soho House Toronto Partnership [Member]            
Schedule of Equity Method Investments [Line Items]            
Equity method investment, Ownership percentage   50.00% 50.00% 50.00%    
Options exercised | shares   0        
Operating leases, Term of contract   10 years        
Soho House Toronto Partnership [Member] | Soho House Toronto Joint Venture [Member]            
Schedule of Equity Method Investments [Line Items]            
Percentage of equity interest acquired           50.00%
Soho House Toronto Partnership [Member] | Soho House Toronto Joint Venture [Member] | Investor [Member]            
Schedule of Equity Method Investments [Line Items]            
Percentage of equity interest acquired           25.00%
Little Beach House Barcelona S.L [Member]            
Schedule of Equity Method Investments [Line Items]            
Additional payments to joint venture | $     $ 8      
Little Beach House Barcelona S.L [Member] | Soho House Barcelona Joint Venture [Member]            
Schedule of Equity Method Investments [Line Items]            
Percentage of equity interest acquired         50.00%  
Raycliff Red LLP [Member]            
Schedule of Equity Method Investments [Line Items]            
Equity method investment, Ownership percentage   50.00% 50.00% 50.00%    
Maximum limit of distribution of cash generated from other than operation allocation to unit A holder | € € 500,000          
Raycliff Red LLP [Member] | Put Option [Member]            
Schedule of Equity Method Investments [Line Items]            
Put option strike price | $ / shares   $ 0        
Raycliff Red LLP [Member] | Hotel operations [Member]            
Schedule of Equity Method Investments [Line Items]            
Management Fee Recieved 2.50%          
Raycliff Red LLP [Member] | Restaurant Operations [Member]            
Schedule of Equity Method Investments [Line Items]            
Management Fee Recieved 3.50%          
Raycliff Red LLP [Member] | Redchurch Street London Joint Venture [Member]            
Schedule of Equity Method Investments [Line Items]            
Percentage of equity interest acquired 50.00%          
v3.22.4
Leases - Additional Information (Detail)
$ in Thousands
 12 Months Ended
Jan. 01, 2023
USD ($)
Number
Jan. 02, 2022
USD ($)
Jan. 03, 2021
USD ($)
Jan. 01, 2022
Number
Apr. 30, 2017
USD ($)
Finance leases, Term of contract 50 years        
Operating leases, Option to extend multiple   This lease was extended for an additional 5 years in Fiscal 2021.    
Number of units under Finance lease | Number 3        
Finance leases, Renewal term 25 years        
Number of units subject to operating lease | Number 115        
New units subject to operating lease | Number       13  
Finance lease liabilities, Non current $ 76,638 $ 72,582      
Operating leases, Rental expenses 133,000 117,000 $ 110,000    
Variable lease cost 20,000 6,000 3,000    
Finance lease assets, Amortization expense 2,000 2,000 2,000    
Finance lease, Interest expense 5,000 $ 5,000 $ 5,000    
Operating lease liability, Payments due $ 2,307,155        
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]   Property, Plant and Equipment, Net Property, Plant and Equipment, Net    
Operating lease, Weighted average remaining lease term 17 years 18 years      
DTLA Property [Member]          
Finance leases, Term of contract         20 years
Finance leases, Renewal term         10 years
Finance lease liabilities, Non current $ 76,000 $ 76,000     $ 6,400
Capital leased assets         30,000
Leased assets contingently held by buyer         9,000
Additional lease commitment amount         $ 59,000
Finance lease liability current 0 0      
Capitalized interest 85,000 $ 87,000      
2023 [Member]          
Operating lease liability, Payments due $ 286,000        
Operating lease, Weighted average remaining lease term 24 years        
2024 [Member]          
Operating lease liability, Payments due $ 866,000        
Operating lease, Weighted average remaining lease term 18 years        
2025 [Member]          
Operating lease liability, Payments due $ 320,000        
Operating lease, Weighted average remaining lease term 15 years        
Minimum [Member]          
Operating leases, Term of contract 1 year        
Operating leases, Renewal term 5 years        
Maximum [Member]          
Operating leases, Term of contract 30 years        
Operating leases, Renewal term 10 years        
v3.22.4
Leases - Summary of The Maturity of The Company's Operating and Finance Lease Liabilities (Detail)
$ in Thousands
Jan. 01, 2023
USD ($)
Lessee, Operating Lease, Liability, to be Paid [Abstract]  
2023 $ 133,942
2024 137,792
2025 140,910
2026 141,807
2027 133,194
Thereafter 1,619,510
Total undiscounted lease payments 2,307,155
Present value adjustment 1,058,079
Total net lease liabilities 1,249,076
2023 5,734
2024 5,735
2025 5,774
2026 5,699
2027 5,699
Thereafter 216,541
Total undiscounted lease payments 245,182
Present value adjustment 168,544
Total net lease liabilities $ 76,638
v3.22.4
Leases - Summary of The Supplemental Disclosure For The Statement of Cash Flows Related to Operating and Finance Leases (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Cash paid for amounts included in the measurement of lease liabilities:      
Operating cash flows from operating leases $ (118,269) $ (86,523) $ (67,412)
Interest payments for finance leases (5,002) (5,037) (5,112)
Cash flows from financing activities related to leases      
Principal payments for finance leases (528) (281) (230)
Supplemental disclosures of non-cash investing and financing activities:      
Operating lease assets obtained in exchange for new operating lease liabilities 133,743 170,105 67,235
Acquisitions of property and equipment under finance leases (Note 12) $ 12,315 $ 0 $ 0
v3.22.4
Leases - Summary of The Additional Information Related to Operating and Finance Leases (Detail)
Jan. 01, 2023
Jan. 02, 2022
Weighted-average remaining lease term    
Finance leases 43 years 44 years
Operating leases 17 years 18 years
Weighted-average discount rate    
Finance leases 7.29% 7.00%
Operating leases 7.93% 8.06%
v3.22.4
Leases - Summary of The Company's Estimated Future Undiscounted Lease Payments For Current Leases (Detail)
$ in Thousands
Jan. 01, 2023
USD ($)
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]  
2023 $ 4,342
2024 27,252
2025 59,323
2026 73,904
2027 77,513
Thereafter 1,229,816
Total undiscounted lease payments expected to be capitalized $ 1,472,150
v3.22.4
Leases - Cash flows related to the financing obligation for the DTLA property (Details) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Cash flows from investing activities      
Purchase of property and equipment $ (73,729) $ (90,812) $ (128,939)
Cash flows from financing activities      
Proceeds from financing obligation 0 0 3,652
Supplemental disclosures of non-cash investing and financing activities:      
Non-cash capitalized interest under financing obligation 0 0 0
DTLA Property [Member]      
Cash flows from operating activities      
Interest payments for financing obligation (6,894) (5,626) (6,626)
Cash flows from investing activities      
Finance lease, capitalized interest 0
Purchase of property and equipment 0
Cash flows from financing activities      
Principal payments on financing obligation (1,578) (1,334) 0
Proceeds from financing obligation $ 3,652
v3.22.4
Leases - Summary of The Company's Future Undiscounted Finance Lease (Details)
$ in Thousands
Jan. 01, 2023
USD ($)
Property, Plant and Equipment [Line Items]  
2023 $ 5,734
2024 5,735
2025 5,774
2026 5,699
2027 5,699
Thereafter 216,541
Total undiscounted lease payments 245,182
Present value adjustment 168,544
Total net lease liabilities 76,638
DTLA Property [Member]  
Property, Plant and Equipment [Line Items]  
2023 7,031
2024 7,172
2025 7,316
2026 7,462
2027 7,611
Thereafter 116,442
Total undiscounted lease payments 153,034
Present value adjustment 76,795
Total net lease liabilities $ 76,239
v3.22.4
Revenue Recognition - Summary of Disaggregation of Revenue (Detail)
$ in Thousands
 12 Months Ended
Jan. 01, 2023
USD ($)
Disaggregation of Revenue [Line Items]  
Total future revenues $ 78,308
Future periods [Member]  
Disaggregation of Revenue [Line Items]  
Total future revenues 27,118
Membership And Registration Fees [Member]  
Disaggregation of Revenue [Line Items]  
Total future revenues 78,308
Membership And Registration Fees [Member] | Future periods [Member]  
Disaggregation of Revenue [Line Items]  
Total future revenues $ 27,118
v3.22.4
Revenue Recognition - Summary of Contract Receivables, Assets and Contract Liabilities (Details) - USD ($)
$ in Thousands
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Dec. 29, 2019
Revenue Recognition [Abstract]        
Contract receivables $ 42,215 $ 19,338    
Contract assets 9,344 5,553    
Contract liabilities $ 130,975 $ 113,630 $ 85,723 $ 93,731
v3.22.4
Revenue Recognition - Additional Information (Detail) - USD ($)
$ in Millions
 12 Months Ended
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Revenue Recognition [Abstract]      
Revenue, Remaining Performance Obligation, Percentage 30.00% 36.00% 50.00%
Contract with customer, asset, transferred to receivables $ 6 $ 8  
v3.22.4
Revenue Recognition - Summary of Significant Changes in Contract Liabilities (Details) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Revenue Recognition [Abstract]      
Opening Balance $ 113,630 $ 85,723 $ 93,731
Revenue recognized that was included in the contract liability balance at the beginning of the period (86,111) (61,763) (71,425)
Increases due to cash received during the period 104,652 89,914 62,880
Foreign currency translation (1,196) (244) 537
Closing Balance $ 130,975 $ 113,630 $ 85,723
v3.22.4
Prepaid Expenses and Other Current Assets - Prepaid Expenses And Other Current Assets (Detail) - USD ($)
$ in Thousands
Jan. 01, 2023
Jan. 02, 2022
Prepaid Expense and Other Assets, Current [Abstract]    
Amounts owed by equity method investees $ 1,492 $ 879
Prepayments and accrued income 27,416 26,037
Contract assets 9,344 5,553
Other receivables 52,849 24,535
Total prepaid expenses and other current assets $ 91,101 $ 57,004
v3.22.4
Property and Equipment, Net - Property and Equipment ,Net (Details) - USD ($)
$ in Thousands
Jan. 01, 2023
Jan. 02, 2022
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 1,031,415 $ 1,000,721
Less: Accumulated depreciation (384,414) (315,760)
Property and equipment, net 647,001 684,961
Land and Building [Member]    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 213,901 216,540
Leasehold Improvements [Member]    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 353,181 300,821
Fixtures and Fittings [Member]    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 336,758 287,866
Office Equipment and Other [Member]    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 42,660 41,176
Construction in Progress [Member]    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 20,394 81,208
Finance Property Lease [Member]    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 64,521 $ 73,110
v3.22.4
Property and Equipment, Net - Additional Information (Detail) - USD ($)
 12 Months Ended
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Property, Plant and Equipment [Line Items]      
Depreciation $ 81,000,000 $ 69,000,000 $ 56,000,000
Proceeds from sale of property and equipment $ 926,000 $ 0 0
Maximum [Member]      
Property, Plant and Equipment [Line Items]      
Assets impairment loss     $ 1,000,000
v3.22.4
Goodwill and Intangible Assets - Summary of Goodwill (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Goodwill [Line Items]      
Beginning balance $ 214,257 $ 201,482 $ 191,177
Foreign currency translation adjustment (14,611) (5,891) 10,305
Ending balance 199,646 214,257 201,482
United Kingdom [Member]      
Goodwill [Line Items]      
Beginning balance 100,665 101,602 97,372
Foreign currency translation adjustment (10,690) (937) 4,230
Ending balance 89,975 100,665 101,602
North America [Member]      
Goodwill [Line Items]      
Beginning balance 47,446 28,780 28,780
Foreign currency translation adjustment 0 0 0
Ending balance 47,446 47,446 28,780
Europe and RoW [Member]      
Goodwill [Line Items]      
Beginning balance 66,146 71,100 65,025
Foreign currency translation adjustment (3,921) (4,954) 6,075
Ending balance $ 62,225 66,146 $ 71,100
LINE And Saguaro Acquisition [Member]      
Goodwill [Line Items]      
Acquisition   2,043  
LINE And Saguaro Acquisition [Member] | United Kingdom [Member]      
Goodwill [Line Items]      
Acquisition   0  
LINE And Saguaro Acquisition [Member] | North America [Member]      
Goodwill [Line Items]      
Acquisition   2,043  
LINE And Saguaro Acquisition [Member] | Europe and RoW [Member]      
Goodwill [Line Items]      
Acquisition   0  
Cipura Acquisition [Member]      
Goodwill [Line Items]      
Acquisition   16,623  
Cipura Acquisition [Member] | United Kingdom [Member]      
Goodwill [Line Items]      
Acquisition   0  
Cipura Acquisition [Member] | North America [Member]      
Goodwill [Line Items]      
Acquisition   16,623  
Cipura Acquisition [Member] | Europe and RoW [Member]      
Goodwill [Line Items]      
Acquisition   $ 0  
v3.22.4
Goodwill and Intangible Assets - Summary of Finite-lived Intangible Assets (Details) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 01, 2023
Jan. 02, 2022
Acquired Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Value $ 221,581 $ 212,091
Accumulated Amortization 95,613 79,933
Net Carrying Value $ 125,968 132,158
Average Amortization Period (in years) 17 years  
Brand [Member]    
Acquired Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Value $ 109,420 114,784
Accumulated Amortization 50,358 45,749
Net Carrying Value $ 59,062 69,035
Average Amortization Period (in years) 24 years  
Membership List [Member]    
Acquired Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Value $ 15,748 16,144
Accumulated Amortization 8,890 8,131
Net Carrying Value $ 6,858 8,013
Average Amortization Period (in years) 20 years  
Hotel Management Agreements [Member]    
Acquired Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Value $ 23,600 23,600
Accumulated Amortization 2,401 828
Net Carrying Value $ 21,199 22,772
Average Amortization Period (in years) 15 years  
Website, Internal-Use Software Development Costs, and Other [Member]    
Acquired Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Value $ 72,813 57,563
Accumulated Amortization 33,964 25,225
Net Carrying Value $ 38,849 $ 32,338
Average Amortization Period (in years) 7 years  
v3.22.4
Goodwill and Intangible Assets - Schedule of future amortization expense (Details)
$ in Thousands
Jan. 01, 2023
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]  
2023 $ 19,863
2024 17,314
2025 15,167
2026 11,064
2027 $ 7,795
v3.22.4
Goodwill and Intangible Assets (Additional Information) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Acquired Finite-Lived Intangible Assets [Line Items]      
Goodwill, Impairment Loss $ 0 $ 0 $ 0
Accumulated Amortization 95,613 79,933  
Amortization of Intangible Assets 19,000 15,000 $ 14,000
Brand [Member]      
Acquired Finite-Lived Intangible Assets [Line Items]      
Accumulated Amortization 50,358 45,749  
Membership List [Member]      
Acquired Finite-Lived Intangible Assets [Line Items]      
Accumulated Amortization 8,890 8,131  
Hotel Management Agreements [Member]      
Acquired Finite-Lived Intangible Assets [Line Items]      
Accumulated Amortization 2,401 828  
Website, Internal-Use Software Development Costs, and Other [Member]      
Acquired Finite-Lived Intangible Assets [Line Items]      
Accumulated Amortization 33,964 25,225  
Website Development Costs and Internal-Use Software [Member]      
Acquired Finite-Lived Intangible Assets [Line Items]      
Accumulated Amortization $ 35,000 $ 29,000  
v3.22.4
Accrued Liabilities and Other Current Liabilities (Detail) - USD ($)
$ in Thousands
Jan. 01, 2023
Jan. 02, 2022
Accrued Liabilities [Abstract]    
Accrued interest $ 440 $ 727
Hotel deposits 11,758 9,246
Trade, capital and other accruals 71,914 53,154
Accrued Liabilities And Other Current Liabilities $ 84,112 $ 63,127
v3.22.4
Accrued Liabilities and Other Current Liabilities - Additional Information (Detail) - USD ($)
$ in Thousands
Jan. 01, 2023
Jan. 02, 2022
Payables and Accruals [Abstract]    
Social security taxes $ 0 $ 1,000
v3.22.4
Debt - Summary of Property Mortgage Loans, Net of Debt Issuance Costs (Detail)
$ in Thousands, £ in Millions
Jan. 01, 2023
USD ($)
Jan. 02, 2022
USD ($)
Jan. 03, 2021
USD ($)
Jan. 03, 2021
GBP (£)
Feb. 28, 2019
USD ($)
Disclosure of Property Mortgage Loans, Net of Debt Issuance Costs [Line Items]          
Debt balances, net $ 580,909 $ 466,266      
Less: Current portion of long-term debt (1,005) (6,923)      
Total long-term debt, net of current portion 579,904 459,343      
Related party loans, net 24,612 21,661      
Less: Current portion of related party loans (24,612) (21,661)      
Total related party loans, net of current portion 0 0      
Related Party Loan Maturing September 2023 [Member]          
Disclosure of Property Mortgage Loans, Net of Debt Issuance Costs [Line Items]          
Related party loans, net 24,612 21,092      
Related Party Loan Maturing December 2022 [Member]          
Disclosure of Property Mortgage Loans, Net of Debt Issuance Costs [Line Items]          
Related party loans, net 0 569      
Permira Senior Facility [Member]          
Disclosure of Property Mortgage Loans, Net of Debt Issuance Costs [Line Items]          
Debt balances, net     $ 542,000 £ 397  
Senior Notes [Member]          
Disclosure of Property Mortgage Loans, Net of Debt Issuance Costs [Line Items]          
Debt balances, net 570,712 447,719      
Other Loans [Member]          
Disclosure of Property Mortgage Loans, Net of Debt Issuance Costs [Line Items]          
Debt balances, net 10,197 18,547      
Mortgages [Member]          
Disclosure of Property Mortgage Loans, Net of Debt Issuance Costs [Line Items]          
Property mortgage loans, net 116,187 115,122      
Mortgages [Member] | Term Loam [Member]          
Disclosure of Property Mortgage Loans, Net of Debt Issuance Costs [Line Items]          
Property mortgage loans, net 54,614 54,293      
Mortgages [Member] | Subordinated Debt [Member]          
Disclosure of Property Mortgage Loans, Net of Debt Issuance Costs [Line Items]          
Property mortgage loans, net $ 61,573 $ 60,829     $ 62,000
v3.22.4
Debt - Summary of Property Mortgage Loans, Net of Debt Issuance Costs (Parenthetical) (Detail)
 12 Months Ended
Jan. 03, 2021
Apr. 01, 2020
Dec. 31, 2017
Apr. 01, 2017
Jan. 01, 2023
Jan. 02, 2022
Aug. 31, 2020
May 31, 2020
Feb. 28, 2019
Short-Term Debt [Line Items]                  
Interest rate             4.00%    
Revolving Credit Facility [Member]                  
Short-Term Debt [Line Items]                  
Debt Instrument, Maturity Date   Jan. 01, 2023              
Permira Senior Facility [Member]                  
Short-Term Debt [Line Items]                  
Debt Instrument, Maturity Date Apr. 01, 2023     Apr. 01, 2022          
Greek Street Loan [Member]                  
Short-Term Debt [Line Items]                  
Interest rate         7.50%        
Debt Instrument, Maturity Date         Jan. 31, 2028        
Senior Notes [Member]                  
Short-Term Debt [Line Items]                  
Interest rate         8.1764% 8.1764%      
Debt Instrument, Maturity Date         Mar. 31, 2027 Mar. 31, 2027      
Mortgages [Member]                  
Short-Term Debt [Line Items]                  
Debt Instrument, Maturity Date     Sep. 29, 2023            
Mortgages [Member] | Term Loam [Member]                  
Short-Term Debt [Line Items]                  
Interest rate         5.34% 5.34%      
Debt Instrument, Maturity Date         Feb. 06, 2024 Feb. 06, 2024      
Mortgages [Member] | Subordinated Debt [Member]                  
Short-Term Debt [Line Items]                  
Interest rate     7.00%   7.25% 7.25%     7.25%
Debt Instrument, Maturity Date         Feb. 06, 2024 Feb. 06, 2024      
Unsecured Debt [Member]                  
Short-Term Debt [Line Items]                  
Interest rate               10.00%  
Unsecured Debt [Member] | Debt Instrument, Redemption, Period One [Member]                  
Short-Term Debt [Line Items]                  
Interest rate         7.00% 7.00%      
Debt Instrument, Maturity Date         Sep. 30, 2023 Sep. 30, 2023      
Unsecured Debt [Member] | Debt Instrument, Redemption, Period Two [Member]                  
Short-Term Debt [Line Items]                  
Interest rate         4.00% 4.00%      
Debt Instrument, Maturity Date         Dec. 31, 2022 Dec. 31, 2022      
Additional Notes [Member]                  
Short-Term Debt [Line Items]                  
Interest rate         8.50% 8.50%      
v3.22.4
Debt - Additional Information (Details)
€ in Millions, £ in Millions
 1 Months Ended 12 Months Ended
Mar. 31, 2022
USD ($)
Mar. 09, 2022
USD ($)
Jan. 02, 2022
USD ($)
Mar. 01, 2021
USD ($)
Mar. 01, 2021
GBP (£)
Mar. 01, 2021
EUR (€)
Jan. 03, 2021
USD ($)
May 31, 2020
shares
Apr. 01, 2020
USD ($)
Jun. 01, 2018
USD ($)
Dec. 31, 2017
GBP (£)
Apr. 01, 2017
USD ($)
Mar. 31, 2022
USD ($)
Aug. 31, 2020
USD ($)
Aug. 31, 2020
EUR (€)
Feb. 28, 2019
USD ($)
Jan. 01, 2023
USD ($)
Jan. 01, 2023
GBP (£)
Jan. 02, 2022
USD ($)
Jan. 03, 2021
USD ($)
Dec. 29, 2019
Jan. 01, 2023
GBP (£)
Jan. 02, 2022
GBP (£)
Jun. 01, 2021
USD ($)
Jun. 01, 2021
GBP (£)
Mar. 31, 2021
USD ($)
Mar. 31, 2021
GBP (£)
Mar. 31, 2021
EUR (€)
Jan. 03, 2021
GBP (£)
Aug. 31, 2020
EUR (€)
Apr. 24, 2020
USD ($)
Apr. 01, 2020
GBP (£)
Dec. 05, 2019
USD ($)
Dec. 05, 2019
GBP (£)
Jan. 01, 2018
USD ($)
Jan. 01, 2018
GBP (£)
Apr. 01, 2017
GBP (£)
Debt Instrument [Line Items]                                                                          
Interest Expense                                 $ 71,499,000   $ 84,382,000 $ 77,792,000                                  
Interest rate                           4.00%                               4.00%              
Long-term Debt     $ 466,266,000                           580,909,000   466,266,000                                    
Gain (Loss) on Extinguishment of Debt, before Write off of Debt Issuance Cost                                 0   (14,126,000) 0                                  
Write-offs of unamortized debt issuance costs                                     5,000,000                                    
Debt Instrument, Interest Rate, Stated Percentage                           4.00%                               4.00%              
Unamortized debt issuance costs                                 1,000,000                                        
Senior secured notes                                                   $ 295,000,000   € 62                  
Transaction costs                                 10,000,000                                        
Consolidated adjusted EBITDA                                 89,877,000   16,740,000 226,000                                  
Letter of guarantee                                 $ 5,000,000         £ 4                              
Revolving credit facility maturity date extend description                                 The Second Amendment amends the Revolving Credit Facility to extend the maturity date from January 25, 2023 to January 25, 2024. On November 10, 2022, Soho House Bond Limited, a wholly-owned subsidiary of the Company entered into the Third Amended and Restated Revolving Facility Agreement (the “Third Amendment”), which amends and restates the Revolving Credit Facility. The Third Amendment amends the Revolving Credit Facility to extend the maturity date from January 25, 2024 to July 25, 2026. In addition the Third Amendment provides that from March 2023 we are required to maintain certain leverage covenants (as defined in the Revolving Credit Facility) which are only applicable when 40% or more of the facility is drawn. The Second Amendment amends the Revolving Credit Facility to extend the maturity date from January 25, 2023 to January 25, 2024. On November 10, 2022, Soho House Bond Limited, a wholly-owned subsidiary of the Company entered into the Third Amended and Restated Revolving Facility Agreement (the “Third Amendment”), which amends and restates the Revolving Credit Facility. The Third Amendment amends the Revolving Credit Facility to extend the maturity date from January 25, 2024 to July 25, 2026. In addition the Third Amendment provides that from March 2023 we are required to maintain certain leverage covenants (as defined in the Revolving Credit Facility) which are only applicable when 40% or more of the facility is drawn.                                      
Exit fee     5,000,000                               5,000,000                                    
Maximum [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Unamortized debt issuance costs     1,000,000                           $ 1,000,000   1,000,000                                    
Related Party Loans [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Debt Instrument, Face Amount                           $ 1,000,000                               € 1              
Soho Works Limited [Member] | Related Party Loans [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Line of credit additional borrowing capacity                                 3,000,000         3                              
Interest Expense                                 3,000,000   2,000,000 2,000,000                                  
Carrying amount of the term loan     $ 21,000,000                           $ 25,000,000   $ 21,000,000     £ 20 £ 16                            
Soho House Hong Kong [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Proceeds from loan agreement                   $ 6,500,000                                                      
Fixed rate borrowings [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Weighted-average interest rate     8.00%                           8.00%   8.00%     8.00% 8.00%                            
Floating Rate borrowings [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Weighted-average interest rate     0.00%                           0.00%   0.00%     0.00% 0.00%                            
Paycheck Protection Program [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Line of credit facility                                                             $ 22,000,000            
Interest rate                                                             1.00%            
Debt Instrument, Interest Rate, Stated Percentage                                                             1.00%            
Development Funding Agreement [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Interest Expense                                 $ 1,000,000   $ 1,000,000                                    
Interest rate                                               7.90% 7.90%                        
Debt Instrument, Interest Rate, Stated Percentage                                               7.90% 7.90%                        
Other Commitment                                               $ 12,000,000 £ 9                        
London Interbank Offered Rate (LIBOR) [Member] | Soho House Hong Kong [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Interest rate                   7.00%                                                      
Debt Instrument, Interest Rate, Stated Percentage                   7.00%                                                      
Permira Senior Facility [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Line of credit facility                       $ 345,000,000                                                 £ 275
Debt Instrument, Maturity Date             Apr. 01, 2023         Apr. 01, 2022                                                  
Interest Expense                                     13,000,000 51,000,000                                  
Long-term Debt             $ 542,000,000                         542,000,000                 £ 397                
Paid-in-Kind Interest                                     0 26,000,000                                  
Accrued payment-in-kind interest     $ 79,000,000                                                                    
Gain (Loss) on Extinguishment of Debt, before Write off of Debt Issuance Cost                                     14,000,000                                    
Extinguishment of Debt,prepayment penalties     4,000,000                                                                    
Permira Senior Facility [Member] | GBP tranche [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Paid-in-Kind Interest       $ 505,000,000 £ 368                                                                
Permira Senior Facility [Member] | USD tranche [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Paid-in-Kind Interest       8,000,000                                                                  
Permira Senior Facility [Member] | EUR tranche [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Paid-in-Kind Interest       $ 53,000,000   € 45                                                              
Mortgages [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Line of credit facility | £                     £ 40                                                    
Debt Instrument, Maturity Date                     Sep. 29, 2023                                                    
Interest Expense                                 8,000,000   8,000,000 8,000,000                                  
Unamortized debt issuance costs     2,000,000                           1,000,000   2,000,000                                    
Property Mortgage Loans     $ 115,122,000                           $ 116,187,000   $ 115,122,000                                    
Debt Instrument, Maturity Date, Description                               February 2024                                          
Mortgages [Member] | Term Loan [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Interest rate                               5.34%                                          
Debt Instrument, Interest Rate, Stated Percentage                               5.34%                                          
Property Mortgage Loans                               $ 55,000,000                                          
Mortgages [Member] | Subordinated Debt [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Debt Instrument, Maturity Date                                 Feb. 06, 2024 Feb. 06, 2024 Feb. 06, 2024                                    
Interest rate     7.25%               7.00%         7.25% 7.25%   7.25%     7.25% 7.25%                            
Debt Instrument, Interest Rate, Stated Percentage     7.25%               7.00%         7.25% 7.25%   7.25%     7.25% 7.25%                            
Property Mortgage Loans     $ 60,829,000                         $ 62,000,000 $ 61,573,000   $ 60,829,000                                    
Unsecured Debt [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Interest Expense                                       2,000,000                                  
Interest rate               10.00%                                                          
Debt Instrument, Interest Rate, Stated Percentage               10.00%                                                          
Non-interest bearing loan | £                                   £ 19                                      
Stock Issued During Period, Shares, | shares               2,176,424                                                          
Revolving Credit Facility [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Line of credit facility                                                                 $ 72,000,000 £ 55      
Debt Instrument, Maturity Date                 Jan. 01, 2023                                                        
Line of credit additional borrowing capacity                 $ 25,000,000                                             £ 20          
Line of Credit Facility, Remaining Borrowing Capacity | £                                           £ 71                              
Interest Expense                                 3,000,000   3,000,000 4,000,000                                  
Consolidated adjusted EBITDA                                 39,000,000 £ 32                                      
Line of credit facility, current borrowing capacity                                 86,000,000                                        
Greek Street properties                                                                          
Debt Instrument [Line Items]                                                                          
Line of credit facility                                                                     $ 7,000,000 £ 5  
Interest rate                                                                     7.50% 7.50%  
Debt Instrument, Interest Rate, Stated Percentage                                                                     7.50% 7.50%  
Compagnie de Phalsbourg [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Line of credit facility                                 6,000,000         £ 6                              
Debt Instrument, Maturity Date                                         Jan. 30, 2025                                
Interest Expense                                 1,000,000   1,000,000 1,000,000                                  
Interest rate                                         7.00%                                
Debt Instrument, Interest Rate, Stated Percentage                                         7.00%                                
Optima Bank Loan [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Interest Expense                                 1,000,000   1,000,000 $ 1,000,000                                  
Government of Greece [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Debt Instrument, Maturity Date                           Jul. 31, 2025 Jul. 31, 2025                                            
Interest rate                           3.10%                               3.10%              
Debt Instrument, Interest Rate, Stated Percentage                           3.10%                               3.10%              
Debt instrument , principal amount                           $ 2,000,000 € 2                                            
Soho House Hong Kong Loan [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Loan Term                   5 years                                                      
Secured Debt [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Unamortized debt issuance costs                                 8,000,000                                        
Transaction costs     $ 12,000,000                           1,000,000   12,000,000                                    
Secured Debt [Member] | Maximum [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Transaction costs                                 13,000,000                                        
Secured Debt [Member] | Additional Notes [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Value of option exercised   $ 100,000,000                                                                      
Secured Debt [Member] | Permira Senior Facility [Member] | London Interbank Offered Rate (LIBOR) [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Interest rate                       1.00%                                                 1.00%
Debt Instrument, Interest Rate, Stated Percentage                       1.00%                                                 1.00%
Secured Debt [Member] | Affiliated Entity [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Senior secured notes                                                   73,000,000 £ 53                    
Secured Debt [Member] | Advised loans [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Senior secured notes                                                   $ 73,000,000                      
Secured Debt [Member] | Soho House Hong Kong Loan [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Debt Instrument, Maturity Date                         Mar. 31, 2027                                                
Interest Expense                                 $ 47,000,000   $ 30,000,000                                    
Secured Debt [Member] | Soho House Hong Kong Loan [Member] | Initial Notes [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Interest rate 2.0192%                       2.0192%                                                
Debt Instrument, Interest Rate, Stated Percentage 2.0192%                       2.0192%                                                
Debt instrument basis rate 6.1572%                                                                        
Secured Debt [Member] | Soho House Hong Kong Loan [Member] | Additional Notes [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Interest rate 2.125%                       2.125%                                                
Debt Instrument, Interest Rate, Stated Percentage 2.125%                       2.125%                                                
Debt instrument basis rate                         6.375%                                                
Secured Debt [Member] | Soho House Hong Kong Loan [Member] | Additional Notes [Member] | Maximum [Member]                                                                          
Debt Instrument [Line Items]                                                                          
Senior secured notes $ 100,000,000                       $ 100,000,000                                                
v3.22.4
Debt - Summary Of Remaining Loans Consist (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 01, 2023
Aug. 31, 2020
Debt Instrument [Line Items]    
Applicable interest rate as of January 1, 2023   4.00%
Greek Street Loan [Member]    
Debt Instrument [Line Items]    
Principal balance as of January 1, 2023 $ 3,457  
Applicable interest rate as of January 1, 2023 7.50%  
Maturity date Jan. 31, 2028  
Compagnie De Phalsbourg Credit Facility [Member]    
Debt Instrument [Line Items]    
Principal balance as of January 1, 2023 $ 5,542  
Applicable interest rate as of January 1, 2023 7.00%  
Maturity date Jan. 31, 2025  
Greek Government Loan [Member]    
Debt Instrument [Line Items]    
Principal balance as of January 1, 2023 $ 1,204  
Applicable interest rate as of January 1, 2023 3.10%  
Maturity date Jul. 31, 2025  
v3.22.4
Debt - Summary Of Future Principal Payments For The Company's Debt, Property Mortgage Loans, and Related Party Loans (Detail)
$ in Thousands
Jan. 01, 2023
USD ($)
Debt Instruments [Abstract]  
2023 $ 25,246
2024 117,677
2025 721
2026 7,499
2027 579,714
Thereafter 11
Total $ 730,868
v3.22.4
Fair Value Measurements - Summary of Estimated Fair Values of the Company's Debt Instruments (Detail) - Fair Value Inputs Level 3 Member - USD ($)
$ in Thousands
Jan. 01, 2023
Jan. 02, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Carrying Value $ 697,096 $ 575,101
Fair Value 668,075 587,564
Senior Secured Notes [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Carrying Value 570,712 447,719
Fair Value 545,362 460,182
Property mortgage loans [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Carrying Value 116,187 115,122
Fair Value 113,066 115,122
Other non-current debt [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Carrying Value 10,197 12,260
Fair Value $ 9,647 $ 12,260
v3.22.4
Fair Value Measurements - Additional Information (Detail) - USD ($)
$ in Thousands
Jan. 01, 2023
Jan. 02, 2022
Aug. 31, 2020
Apr. 01, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]        
Fair value, assets and liabilities measured on recurring and nonrecurring basis $ 0 $ 0    
Debt issuance costs 10,000      
Interest rate     4.00%  
Secured Debt [Member]        
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]        
Debt issuance costs $ 1,000 $ 12,000    
Senior Notes [Member]        
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]        
Interest rate 8.1764% 8.1764%    
Permira Senior Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Secured Debt [Member]        
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]        
Interest rate       1.00%
v3.22.4
Share-Based Compensation - Additional Information (Detail) - USD ($)
$ / shares in Units, $ in Thousands
 1 Months Ended 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Jul. 31, 2021
Aug. 31, 2020
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Share Based Compensation [Line Items]              
Share-based compensation expense         $ 27,681 $ 26,660 $ 2,618
2020 Equity And Incentive Plan [Member]              
Share Based Compensation [Line Items]              
Share-based compensation grants in period, gross       9,978,143      
Incremental cost       $ 5,000      
Expense for accelerated awards       $ 13,000      
2021 Equity And Incentive Plan [Member]              
Share Based Compensation [Line Items]              
Share-based compensation grants in period, gross     12,107,333        
Shares Reserved for Future Awards         7,948,478    
Stock Appreciation Rights (SARs) [Member]              
Share Based Compensation [Line Items]              
Share-based compensation expense         $ 9,425 $ 15,998 $ 885
Modified Excercise Prices $ 4.00            
Weighted-average grant date fair value, Granted         $ 0 $ 4.43 $ 3.46
Stock Appreciation Rights (SARs) [Member] | 2020 Equity And Incentive Plan [Member]              
Share Based Compensation [Line Items]              
Share-based compensation grants in period, gross         0 1,687,632  
Outstanding as of January 1, 2023         5,290,719 5,840,483 5,536,998
Share-based payment nonvested award, cost not yet recognized         $ 4,000    
Share-based payment nonvested award cost not yet recognized, period for recognition         9 months 18 days    
Share-based compensation options accelerated outstanding number       6,023,369      
Stock Appreciation Rights (SARs) [Member] | 2020 Equity And Incentive Plan [Member] | Soho House Holdings Limited [Member]              
Share Based Compensation [Line Items]              
Share-based compensation options accelerated outstanding number       7,127,246      
Stock Appreciation Rights (SARs) [Member] | 2021 Equity And Incentive Plan [Member]              
Share Based Compensation [Line Items]              
Outstanding as of January 1, 2023         5,290,719    
Stock Appreciation Rights (SARs) [Member] | 2021 Equity And Incentive Plan [Member] | Soho House Holdings Limited [Member]              
Share Based Compensation [Line Items]              
Outstanding as of January 1, 2023         2,998,865    
Growth Shares [Member]              
Share Based Compensation [Line Items]              
Share-based compensation expense         $ 2,285 $ 5,246 $ 1,733
Share-based payment nonvested award, cost not yet recognized         $ 1,000    
Share-based payment nonvested award cost not yet recognized, period for recognition         7 months 24 days    
Growth Shares [Member] | 2020 Equity And Incentive Plan [Member]              
Share Based Compensation [Line Items]              
Share-based compensation options accelerated outstanding number       781,731      
Growth Shares [Member] | 2020 Equity And Incentive Plan [Member] | Soho House Holdings Limited [Member]              
Share Based Compensation [Line Items]              
Share-based compensation options accelerated outstanding number       2,850,897      
Restricted Stock Units (RSUs) [Member]              
Share Based Compensation [Line Items]              
Share-based compensation grants in period, gross   506,990          
Share-based compensation expense         $ 12,595 $ 5,416 $ 0
Restricted Stock Units (RSUs) [Member] | 2021 Equity And Incentive Plan [Member]              
Share Based Compensation [Line Items]              
Share-based compensation grants in period, gross         1,026,551    
Outstanding as of January 1, 2023         2,998,865 2,622,877  
Shares, Issued         365,000    
Share-based payment nonvested award, cost not yet recognized         $ 15,000    
Share-based payment nonvested award cost not yet recognized, period for recognition         2 years 4 months 13 days    
Weighted-average grant date fair value, Granted         $ 4.79 [1] $ 10.98  
Restricted Stock Units (RSUs) [Member] | 2021 Equity And Incentive Plan [Member] | Soho House Holdings Limited [Member]              
Share Based Compensation [Line Items]              
Outstanding as of January 1, 2023           2,622,877  
MCG Restricted Stock [Member]              
Share Based Compensation [Line Items]              
Outstanding as of January 1, 2023         146,574 390,865  
Type III modifications [Member]              
Share Based Compensation [Line Items]              
Share-based compensation expense         $ 1,902    
Type I modifications [Member]              
Share Based Compensation [Line Items]              
Modified Fair Value $ 2,200            
Incremental Modified Fair Value $ 1,500            
[1] The amount of share-based compensation for the RSUs is based on the fair value of our Class A common stock at the grant date.
v3.22.4
Share-Based Compensation - Summary of Share-Based Compensation (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]      
Total share-based compensation expense $ 27,681 $ 26,660 $ 2,618
Tax benefit for share-based compensation expense 0 0 0
Share-based compensation expense, net of tax 27,681 26,660 2,618
Stock Appreciation Rights (SARs) [Member]      
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]      
Total share-based compensation expense 9,425 15,998 885
Growth Shares [Member]      
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]      
Total share-based compensation expense 2,285 5,246 1,733
Restricted Stock Units (RSUs) [Member]      
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]      
Total share-based compensation expense 12,595 $ 5,416 $ 0
Type III modifications [Member]      
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]      
Total share-based compensation expense 1,902    
Employer-related payroll expense [Member]      
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]      
Total share-based compensation expense [1] $ 1,474    
[1] The expected life assumption is based on the Company's expectation for the period before exercise.
v3.22.4
Share-Based Compensation - Assumptions Used in Applying Pricing Model (Details) - Restricted Stock [Member] - USD ($)
 12 Months Ended
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]      
Expected average life [1]   3 years 6 months 3 years 6 months
Expected volatility [2] 56.00%   45.00%
Expected Volatility Rate, Minimum [2]   50.00%  
Expected Volatility Rate, Maximum [2]   55.00%  
Risk Free Interest Rate, Minimum [3] 3.78% 0.32%  
Risk Free Interest Rate, Maximum [3] 4.25% 0.43%  
Risk-free interest rate [3]     0.25%
Expected dividend yield [4] $ 0.00 $ 0.00 $ 0.00
Maximum [Member]      
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]      
Expected average life 6 years 3 months 18 days    
Minimum [Member]      
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]      
Expected average life [1] 3 years 11 months 1 day    
[1] The expected life assumption is based on the Company's expectation for the period before exercise.
[2] The expected volatility assumption is developed using leverage-adjusted historical volatilities for public peer companies for the period equal to the expected life of the awards.
[3] The risk-free rate is based on the bootstrap adjusted US Treasury Rate Yield Curve Rate as of the valuation date, term matched with expected life of the awards.
[4] The expected dividend yield is 0.0% since the Company does not expect to pay dividends.
v3.22.4
Share-Based Compensation - Summary of Stock Option Activity (Details) - 2020 Equity And Incentive Plan [Member] - USD ($)
$ / shares in Units, $ in Thousands
 1 Months Ended 12 Months Ended
Jan. 03, 2021
Aug. 31, 2020
Jan. 01, 2023
Jan. 02, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Number of Shares, Granted   9,978,143    
Stock Appreciation Rights (SARs) [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Number of Shares, Outstanding as of Beginning balance     5,840,483 5,536,998
Number of Shares, Granted     0 1,687,632
Number of Shares, Exercised     0 0
Number of Shares, Forfeited (pre-IPO conversion)       (97,384)
Number of Shares, Converted (IPO conversion)       (1,103,877)
Number of Shares, Forfeited (post-IPO conversion)     (549,764) (182,886)
Number of Shares, Outstanding as of Ending balance 5,536,998   5,290,719 5,840,483
Number of Shares, Exercisable as of Ending balance     4,246,017 2,808,660
Number of Shares, Vested and expected to vest as of Ending balance     5,290,719 5,840,483
Weighted Average Exercise Price Per Share, Beginning Balance [1]     $ 12.72 $ 10.52
Weighted Average Exercise Price per Share, Granted [1]     0 11.45
Weighted Average Exercise Price Per Share, Forfeited (pre-IPO conversion) [1]       10.86
Weighted Average Exercise Price per Share, Exercised [1]     0 0
Weighted Average Exercise Price Per Share, Forfeited (post-IPO conversion) [1]     12.60 12.63
Weighted Average Exercise Price Per Share, Ending Balance [1] $ 10.52   7.49 12.72
Weighted Average Exercise Price Per Share, Exercisable as of Ending balance [1]     7.49 12.72
Weighted Average Exercise Price Per Share, Vested and expected to vest as of Ending balance [1]     $ 7.49 $ 12.72
Option Outstanding, Weighted Average Remaining Contractual Term 9 years 7 months 24 days   5 years 7 months 28 days 8 years 7 months 9 days
Ending exercisable, Weighted Average Remaining Contractual Term     5 years 1 month 17 days 8 years 4 months 24 days
Options vested and expected to vest, Weighted Average Remaining Contractual Term     5 years 7 months 28 days 8 years 7 months 9 days
Option outstanding, Aggregate Intrinsic Value       $ 1,733,089
Ending exercisable, Aggregate Intrinsic Value     $ 0 864,610
Options vested and expected to vest, Aggregate Intrinsic Value     $ 0 $ 1,733,089
[1] In December 2022, the Company modified the exercise prices for certain outstanding SAR awards to be $4.00 per share. This contributed to the reduction in the weighted average exercise price per share to $7.49.
v3.22.4
Share-Based Compensation -Summary of Stock Option Activity (Parenthetical) (Details) - Stock Appreciation Rights (SARs) [Member]
 1 Months Ended
Dec. 31, 2022
$ / shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Modified Excercise Prices $ 4.00
Change in Weighted Average Exercise Price $ 7.49
v3.22.4
Share-Based Compensation - Summary Of All Restricted Stock Awards (Details) - 2020 Equity And Incentive Plan [Member] - $ / shares
 1 Months Ended 12 Months Ended
Aug. 31, 2020
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Number of Shares, Granted 9,978,143      
Restricted Stock [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Number of Shares, Nonvested as of Beginning Balance   390,865 2,850,897  
Number of Shares, Granted   0 0  
Number of Shares, Converted     (2,069,166)  
Number of Shares, Vested   (260,577) (390,866)  
Number of Shares, Forfeited   0 0  
Number of Shares, Nonvested as of, Ending Balance   130,288 390,865 2,850,897
Vested and not yet released as of Ending balance   16,286 390,866 0
Number of Shares, Outstanding as of Ending balance   146,574 781,731 2,850,897
Weighted Average Grant Date Fair Value, Nonvested as of as of Beginning Balance   $ 13.28 $ 3.46  
Weighted-average grant date fair value, Granted   0 0  
Weighted Average Grant Date Fair Value, Vested   11.26 13.28  
Weighted Average Grant Date Fair Value, Forfeited     0  
Weighted Average Grant Date Fair Value, Nonvested as of , Ending Balance   13.28 13.28 $ 3.46
Weighted Average Grant Date Fair Value, Vested and not yet released   5.19 13.28  
Weighted Average Exercise Price Per Share, Ending Balance   $ 12.38 $ 13.28 $ 3.46
v3.22.4
Share-Based Compensations - Summary Of All RSUs Granted (Details) - Restricted Stock Units (RSUs) [Member] - 2021 Equity And Incentive Plan [Member] - $ / shares
 12 Months Ended
Jan. 01, 2023
Jan. 02, 2022
Share Based Compensation [Line Items]    
Number of Shares, Outstanding as of Beginning balance 2,622,877  
Granted 1,535,975 2,622,877
Vested (1,975,679)  
Forfeited   0
Number of Shares, Nonvested as of Ending Balance 2,183,173  
Vested and not yet released as of Ending balance 815,692  
Number of Shares, Outstanding as of Ending balance 2,998,865 2,622,877
Weighted Average Grant Date Fair Value, Nonvested as of as of Beginning Balance [1] $ 10.98  
Weighted-average grant date fair value, Granted 4.79 [1] $ 10.98
Weighted Average Grant Date Fair Value, Vested [1] 8.11  
Weighted Average Grant Date Fair Value, Forfeited [1]   0
Weighted Average Grant Date Fair Value, Nonvested as of , Ending Balance [1] 8.44 10.98
Weighted Average Grant Date Fair Value, Vested and not yet released [1] 4.76  
Weighted Average Exercise Price Per Share, Ending Balance $ 7.44 [1] $ 10.98
[1] The amount of share-based compensation for the RSUs is based on the fair value of our Class A common stock at the grant date.
v3.22.4
Redeemable Preferred Shares - Additional Information (Detail)
$ / shares in Units, $ in Thousands, € in Millions
 1 Months Ended 3 Months Ended 12 Months Ended
Jul. 31, 2021
USD ($)
Mar. 31, 2021
USD ($)
$ / shares
shares
Jan. 01, 2023
USD ($)
Jan. 02, 2022
USD ($)
Jul. 19, 2021
shares
May 31, 2016
USD ($)
shares
May 31, 2016
EUR (€)
shares
Redeemable Preferred Shares [Line Items]              
Temporary equity, accretion to redemption value     $ 5,000        
Preferred shares deemed dividend upon conversion       $ 51,469      
Seven Percent Redeemable Preferred Stock [Member]              
Redeemable Preferred Shares [Line Items]              
Temporary equity shares issued | shares           10,000,000 10,000,000
Temporary equity shares percentage           7.00% 7.00%
Temporary equity, par value | €             € 10
Temporary equity value unrelated parties           $ 15,000  
Temporary equity, foreign currency translation adjustments       $ 1,000      
Redeemed preferred shares $ 20,000            
Senior Convertible Preference Shares [Member]              
Redeemable Preferred Shares [Line Items]              
Temporary equity shares issued | shares   12,970,766          
Redemption of SHHL redeemable preferred shares     4,000        
Temporary equity liquidation preference   $ 175,000          
Temporary equity liquidation preference per share | $ / shares   $ 13.49          
Proceeds from issuance of redeemable preferred stock   $ 162,000          
Payments of stock issuance costs   $ 13,000          
Convertible preferred stock, shares issued upon conversion | shares         15,526,619    
Non cash preferred stock dividend rate   8.00%          
Preferred shares deemed dividend upon conversion     $ 51,000        
v3.22.4
SHHL C Ordinary Shares - Additional Information (Detail) - USD ($)
$ in Millions
 1 Months Ended 12 Months Ended
Jul. 19, 2021
Mar. 31, 2021
Dec. 08, 2020
May 19, 2020
Nov. 04, 2019
Aug. 23, 2019
Mar. 31, 2021
May 31, 2020
Jan. 02, 2022
Jan. 01, 2023
Jan. 03, 2021
Dec. 29, 2019
Nov. 30, 2019
Aug. 31, 2019
Temporary Equity [Line Items]                            
Temporary equity interest rate percentage                 5.00%          
Proceeds from redeemable common stock net           $ 63                
Incurred share issuance costs           5                
SHHL [Member]                            
Temporary Equity [Line Items]                            
Common stock shares outstanding                     18,146,543      
Redeemable Class C Common Stock [Member] | SHHL [Member]                            
Temporary Equity [Line Items]                            
Temporary Equity, Shares outstanding   21,187,494         21,187,494       16,435,997 6,933,004    
Temporary Equity, Shares issued   21,187,494         21,187,494       16,435,997 6,933,004 6,933,004 6,933,004
Gross proceeds from redeemable common stock         $ 20 $ 45                
Temporary equity stock issued during the period shares         2,181,507 4,276,347   9,502,993            
Reclassification of temporary equity shares into permanent equity     1,710,546                      
Redeemable Class C Common Stock [Member] | SHHL [Member] | Investor Option Agreement [Member]                            
Temporary Equity [Line Items]                            
Gross proceeds from redeemable common stock       $ 100     $ 50              
Payment of discount on redeemable common stock       $ 6     $ 3              
Temporary equity stock issued during the period shares   4,751,497   9,502,993     4,751,497              
Proceeds from redeemable common stock net   $ 47   $ 94     $ 47              
Incurred share issuance costs       $ 1                    
Common Class C [Member] | SHHL [Member]                            
Temporary Equity [Line Items]                            
Common stock shares outstanding                     1,710,546      
Common Class A [Member]                            
Temporary Equity [Line Items]                            
Common stock shares outstanding                 61,029,730 53,722,597        
Temporary equity shares converted into permanent equity 6,592,023                          
Common Class A [Member] | SHHL [Member]                            
Temporary Equity [Line Items]                            
Gross proceeds from redeemable common stock           $ 5                
Temporary equity stock issued during the period shares           475,150                
Temporary equity shares converted into permanent equity 6,592,023                          
Common Class B [Member]                            
Temporary Equity [Line Items]                            
Common stock shares outstanding                 141,500,385 141,500,385        
Temporary equity shares converted into permanent equity 10,871,215                          
Common Class B [Member] | SHHL [Member]                            
Temporary Equity [Line Items]                            
Temporary equity shares converted into permanent equity 10,871,215                          
v3.22.4
Loss Per Share and Shareholders' Equity (Deficit) - Schedule of Changes in each Class of Redeemable Preferred Shares, Ordinary Shares and Common Stock (Details) - shares
 12 Months Ended
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Soho House Holdings Limited SHHL [Member] | Redeemable Preferred Share [Member]      
Beginning Balance, Shares 0 10,000,000 10,000,000
Issuance of senior convertible preference shares (Note 15), Shares   12,970,766  
Redemption of the May 2016 preferred shares   (10,000,000)  
Conversion of senior convertible preference shares into Class A common stock (Note 1), Shares   (12,970,766)  
Ending Balance, Shares   0 10,000,000
Soho House Holdings Limited SHHL [Member] | Redeemable Class C Common Stock [Member]      
Beginning Balance, Shares 0 16,435,997 6,933,004
Issuance of SHHL redeemable C ordinary shares (Note 16)   4,751,497 9,502,993
Effect of the Reorganization Transactions (Note 1), Shares   (21,187,494)  
Ending Balance, Shares   0 16,435,997
Soho House Holdings Limited SHHL [Member] | Common Class A [Member]      
Beginning Balance, Shares 0 166,575,991 166,110,113
Conversion of SHHL A ordinary shares into SHHL C ordinary shares     (1,710,546)
Conversion of related party loan to SHHL A ordinary shares     2,176,424
Effect of the Reorganization Transactions (Note 1), Shares   (166,575,991)  
Ending Balance, Shares   0 166,575,991
Soho House Holdings Limited SHHL [Member] | Common Class B [Member]      
Beginning Balance, Shares 0 4,469,417 4,469,417
Effect of the Reorganization Transactions (Note 1), Shares   (4,469,417)  
Ending Balance, Shares   0 4,469,417
Soho House Holdings Limited SHHL [Member] | Common Class C [Member]      
Beginning Balance, Shares 0 1,710,546 0
Conversion of SHHL A ordinary shares into SHHL C ordinary shares     1,710,546
Effect of the Reorganization Transactions (Note 1), Shares   (1,710,546)  
Ending Balance, Shares   0 1,710,546
Soho House Holdings Limited SHHL [Member] | Common Class C Two [Member]      
Beginning Balance, Shares 0 3,326,048 3,326,048
SHHL C2 ordinary shares issued in connection with the Cipura Acquisition (Note 3), Shares   644,828  
SHHL C2 ordinary shares issued in connection with the Mandolin Acquisition (Note 3), Shares   92,647  
SHHL C2 ordinary shares issued in connection with the purchase of Soho Works North America noncontrolling interests (Note 3), Shares   3,984,883  
SHHL C2 ordinary shares issued in connection with the purchase of Scorpios noncontrolling interests (Note 3), Shares   572,410  
SHHL C2 ordinary shares issued in connection with the Line and Saguaro Acquisition (Note 3), Shares   1,900,599  
Effect of the Reorganization Transactions (Note 1), Shares   (10,521,415)  
Ending Balance, Shares   0 3,326,048
Soho House Holdings Limited SHHL [Member] | Common Class D [Member]      
Beginning Balance, Shares 0 2,850,897 0
Issuance of SHHL Growth Shares under the 2020 Plan     2,850,897
Effect of the Reorganization Transactions (Note 1), Shares   (2,850,897)  
Ending Balance, Shares   0 2,850,897
MCG Common Stock [Member] | Common Class A [Member]      
Beginning Balance, Shares 61,029,730 0 0
Effect of the Reorganization Transactions (Note 1), Shares   14,935,193  
Issuance of common stock in connection with initial public offering, shares   30,567,918  
Conversion of senior convertible preference shares into Class A common stock (Note 1), Shares   15,526,619  
Shares repurchased (8,467,120)    
Number of Shares, Vested (1,159,987)    
Ending Balance, Shares 53,722,597 61,029,730 0
MCG Common Stock [Member] | Common Class B [Member]      
Beginning Balance, Shares 141,500,385 0 0
Effect of the Reorganization Transactions (Note 1), Shares   141,500,385  
Shares repurchased    
Number of Shares, Vested    
Ending Balance, Shares 141,500,385 141,500,385 0
v3.22.4
Loss Per Share and Shareholders' Equity (Deficit) - Schedule of Reconciliation of the Loss and Number of Shares Basic and Diluted Loss Per Shares (Detail) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]      
Net loss attributable to Membership Collective Group Inc. $ (220,580) $ (265,395) $ (228,461)
Less: Cumulative SHHL preferred shares undeclared dividends   (4,778) $ (4,250)
Less: Incremental accretion of SHHL preferred shares to redemption value   (1,085)  
Foreign currency remeasurement of redeemable preferred shares   666  
Less: Non-cash dividends on the SHHL senior convertible preference shares   (4,335)  
Less: Preferred Shares deemed dividend upon conversion   $ (51,469)  
Weighted average shares outstanding for basic loss per share for Class A and Class B common stockholders 199,985 173,691 141,896
Weighted average shares outstanding for diluted loss per share for Class A and Class B common stockholders 199,985 173,691 141,896
Basic loss per share $ (1.10) $ (1.88) $ (1.64)
Diluted loss per share $ (1.10) $ (1.88) $ (1.64)
Common Class A [Member]      
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]      
Weighted average shares outstanding for basic loss per share for Class A and Class B common stockholders 199,985,264 173,691,203 141,896,349
Weighted average shares outstanding for diluted loss per share for Class A and Class B common stockholders 199,985,264 173,691,203 141,896,349
Common Class B [Member]      
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]      
Net loss adjusted for common stockholders $ (220,580) $ (326,396) $ (232,711)
v3.22.4
Loss Per Share and Shareholders' Equity (Deficit) - Additional Information (Detail)
€ / shares in Units, $ / shares in Units, € in Millions, $ in Millions
 1 Months Ended 12 Months Ended
Nov. 04, 2019
shares
Aug. 23, 2019
USD ($)
shares
Dec. 31, 2020
shares
May 31, 2020
€ / shares
shares
Dec. 31, 2019
USD ($)
Jan. 31, 2012
€ / shares
shares
Jan. 01, 2023
USD ($)
$ / shares
shares
Jan. 01, 2023
EUR (€)
shares
Jan. 02, 2022
$ / shares
shares
Jan. 01, 2023
€ / shares
shares
Mar. 31, 2021
shares
Jan. 03, 2021
shares
Aug. 31, 2020
€ / shares
Dec. 31, 2019
€ / shares
shares
Dec. 29, 2019
shares
Nov. 30, 2019
€ / shares
shares
Aug. 31, 2019
€ / shares
shares
Class of Stock [Line Items]                                  
Vested shares , annual installments period           5 years                      
Incurred share issuance costs | $   $ 5                              
Common stock shares convertible from one class to another conversion ratio             1.00% 1.00%                  
SHHL [Member]                                  
Class of Stock [Line Items]                                  
Common stock shares outstanding                       18,146,543          
Common stock shares convertible from one class to another conversion ratio             1.00% 1.00%                  
Common Class A [Member]                                  
Class of Stock [Line Items]                                  
Common stock par or stated value per share | $ / shares             $ 0.01   $ 0.01                
Common stock shares outstanding             53,722,597   61,029,730 53,722,597              
Common stock shares issued             62,189,717   61,029,730 62,189,717              
Conversion of non redeemable common stock shares from one class into another             14,935,193 14,935,193                  
Stock repurchase program | $             $ 50                    
Share repurchase             8,467,120 8,467,120                  
Share Repurchase Value | $             $ 50                    
Common Class A [Member] | SHHL [Member]                                  
Class of Stock [Line Items]                                  
Temporary equity stock issued during the period shares   475,150                              
Conversion of non redeemable common stock shares from one class into another     1,710,546                            
Class A Class C And Class C Two Common Stock [Member]                                  
Class of Stock [Line Items]                                  
Common stock par or stated value per share | € / shares                   € 1              
Income to be allocated to particular classes of stockholders             228 € 167                  
Redeemable Class C Common Stock [Member]                                  
Class of Stock [Line Items]                                  
Common stock shares voting rights                 one vote                
Redeemable Class C Common Stock [Member] | SHHL [Member]                                  
Class of Stock [Line Items]                                  
Temporary Equity, Par value | € / shares       € 1                       € 1 € 1
Temporary equity shares issued                     21,187,494 16,435,997     6,933,004 6,933,004 6,933,004
Temporary equity stock issued during the period shares 2,181,507 4,276,347   9,502,993                          
Class C Two Common Stock [Member]                                  
Class of Stock [Line Items]                                  
Common stock par or stated value per share | € / shares                           € 1      
Incurred share issuance costs | $         $ 1                        
Common stock shares outstanding                           3,326,048      
Class D Common Stock [Member]                                  
Class of Stock [Line Items]                                  
Common stock par or stated value per share | € / shares                         € 0.0001        
Common stock shares outstanding                       2,850,897          
Common stock shares issued                       2,850,897          
Class A Class B Class C And Class C Two Common Stock [Member]                                  
Class of Stock [Line Items]                                  
Income to be allocated to particular classes of stockholders | $             $ 1,800                    
Common Class B [Member]                                  
Class of Stock [Line Items]                                  
Common stock par or stated value per share | $ / shares             $ 0.01   $ 0.01                
Common stock shares outstanding             141,500,385   141,500,385 141,500,385              
Common stock shares issued             141,500,385   141,500,385 141,500,385              
Conversion of non redeemable common stock shares from one class into another             141,500,385 141,500,385                  
Common Class B [Member] | SHHL [Member]                                  
Class of Stock [Line Items]                                  
Common stock par or stated value per share | € / shares           € 0.0001                      
Number of voting right           0                      
Stock shares issued during the period shares           4,469,417                      
Common Class C [Member] | SHHL [Member]                                  
Class of Stock [Line Items]                                  
Common stock shares outstanding                       1,710,546          
Conversion of non redeemable common stock shares from one class into another     1,710,546                            
Common Class A Redeemable C Ordinary Shares [Member]                                  
Class of Stock [Line Items]                                  
Common stock shares voting rights             one vote one vote                  
Non Exceutive Director [Member] | Redeemable Class C Common Stock [Member]                                  
Class of Stock [Line Items]                                  
Number of directors who can be appointed                 1                
Non Voting Observer Director [Member] | Redeemable Class C Common Stock [Member]                                  
Class of Stock [Line Items]                                  
Number of directors who can be appointed                 1                
v3.22.4
Commitments and Contingencies - Additional Information (Detail)
€ in Millions, £ in Millions, $ in Millions, $ in Millions
 1 Months Ended 12 Months Ended
Mar. 21, 2019
USD ($)
Mar. 21, 2019
EUR (€)
Nov. 18, 2016
USD ($)
Nov. 18, 2016
EUR (€)
Feb. 28, 2018
USD ($)
Feb. 28, 2018
HKD ($)
Jan. 01, 2023
USD ($)
Jan. 02, 2022
USD ($)
Jan. 03, 2021
USD ($)
Jan. 01, 2023
GBP (£)
Jul. 31, 2018
USD ($)
Jul. 31, 2018
GBP (£)
Dec. 07, 2017
USD ($)
Partners
May 31, 2017
USD ($)
May 31, 2017
GBP (£)
May 31, 2016
USD ($)
May 31, 2016
GBP (£)
Aug. 31, 2014
USD ($)
Aug. 31, 2014
GBP (£)
Other Commitments [Line Items]                                      
Loan agreement drew down         $ 6.5                            
Number of Partners | Partners                         2            
Long-term Line of Credit, Noncurrent                         $ 33.5            
Long-term purchase commitment, amount $ 45.0 € 39.5                                  
Proceeds from business interruption insurance             $ 1.0                        
Recoveries in connection with property damage insurance             1.0                        
VIE to Banca March [Member]                                      
Other Commitments [Line Items]                                      
Long-term purchase commitment, amount     $ 19.0 € 18.0                              
Raycliff Red LLP [Member]                                      
Other Commitments [Line Items]                                      
Long-term Construction Loan             26.0     £ 21.0                  
Orca Finance and Invest Ltd to Mirador Barcel S.L [Member]                                      
Other Commitments [Line Items]                                      
Long term purchase commitment redeem     $ 20.0 € 18.0                              
HK [Member]                                      
Other Commitments [Line Items]                                      
Letter of guarantee first anniversary annual reduction         4.0 $ 32.4                          
Letter of guarantee second anniversary annual reduction         3.0 24.3                          
Soho House [Member] | Membership Credit To Be Given To Members [Member]                                      
Other Commitments [Line Items]                                      
Expense Related To Expiration Of Credits               $ 4.0                      
Soho House [Member] | Other Expense [Member] | Membership Credit To Be Given To Members [Member]                                      
Other Commitments [Line Items]                                      
Marketing expenses               8.0 $ 12.0                    
Soho House [Member] | Austin [Member] | Expenditure To Be Incurred On Construction And Site Development [Member]                                      
Other Commitments [Line Items]                                      
Capital expenditure commitments contracted for but not yet incurred             $ 1.0                        
Soho House [Member] | Austin [Member] | Maximum [Member] | Expenditure To Be Incurred On Construction And Site Development [Member]                                      
Other Commitments [Line Items]                                      
Capital expenditure commitments contracted for but not yet incurred               $ 1.0                      
Soho House [Member] | HK [Member]                                      
Other Commitments [Line Items]                                      
Letter of guarantee issued for cash         $ 5.0 $ 40.6                          
Soho House [Member] | United Kingdom [Member] | Raycliff Red LLP [Member]                                      
Other Commitments [Line Items]                                      
Loans Payable to Bank, Noncurrent                     $ 0.5 £ 0.4   $ 26.0 £ 20.0 $ 15.0 £ 10.0 $ 7.0 £ 4.0
v3.22.4
Defined Contribution Plan (Additional Information) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Retirement Benefits [Abstract]      
Plan charges $ 12,000 $ 9,000 $ 11,000
Outstanding or prepaid contributions in pension plan $ 0 $ 0 $ 0
v3.22.4
Income Taxes - Schedule of components of loss before income taxes (Details) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Income Tax Disclosure [Abstract]      
Domestic [1] $ (1,734) $ (45,312) $ (137,120)
Foreign [1] (216,383) (222,508) (98,931)
Loss before income taxes $ (214,649) $ (267,820) $ (236,051)
[1] Prior to the Reorganization Transactions, Domestic refers to the UK tax jurisdiction and Foreign refers to all non-UK tax jurisdictions. Following the Reorganization Transactions, Domestic refers to the US tax jurisdiction and Foreign refers to all non-US tax jurisdictions.
v3.22.4
Income Taxes - Schedule of provision for income taxes (Details) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Current tax expense      
Domestic [1] $ 2,240 $ 0 $ 7
Foreign [1] 2,654 1,167 558
Total current 4,894 1,167 565
Deferred tax expense (benefit)      
Domestic [1] 690 (891) 0
Foreign [1] (453) (618) (1,341)
Total deferred 237 (273) (1,341)
Total income tax expense (benefit) $ 5,131 $ 894 $ (776)
Effective income tax rate (2.00%) 0.00% 0.00%
[1] Prior to the Reorganization Transactions, Domestic refers to the UK tax jurisdiction and Foreign refers to all non-UK tax jurisdictions. Following the Reorganization Transactions, Domestic refers to the US tax jurisdiction and Foreign refers to all non-US tax jurisdictions.
v3.22.4
Income Taxes - Schedule of effective income tax rate reconciliation (Details)
 12 Months Ended
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Income Tax Disclosure [Abstract]      
Benefit at US (Fiscal 2021) and UK (Fiscal 2020 and Fiscal 2019) UK statutory income tax rate 21.00% 21.00% 19.00%
Permanent differences (2.00%) (3.00%) 0.00%
Non deductible expenses (0.00%) (3.00%) 0.00%
Change in unrecognized tax benefits (0.00%) 0.00% 0.00%
Movement in valuation allowances (9.00%) (15.00%) (24.00%)
Change in valuation allowance due to remeasurement of deferred taxes 0.00% (7.00%) 0.00%
Differences in tax rates in other jurisdictions (0.00%) 0.00% 1.00%
Change in tax rates 0.00% 7.00% 1.00%
Loss of tax attributes (13.00%) 0.00% 0.00%
Other 1.00% 0.00% 3.00%
Effective income tax rate (2.00%) 0.00% 0.00%
v3.22.4
Income Taxes - Schedule of deferred tax assets and liabilities (Details) - USD ($)
$ in Thousands
Jan. 01, 2023
Jan. 02, 2022
Deferred tax assets    
Property and equipment, net $ 26,858 $ 24,591
Other short term differences 54,497 17,483
Lease liability 304,717 229,350
Interest limitation carryforward 66,866 73,422
Tax losses 110,201 118,890
Total gross deferred tax assets 563,139 463,736
Valuation Allowance (216,114) (174,265)
Total deferred tax assets 347,025 289,471
Deferred tax liabilities    
Property and equipment, net (23,357) (38,373)
Intangible assets (13,093) (17,422)
Right of use asset (310,956) (232,822)
Other (990) (2,264)
Total gross deferred tax liabilities (348,396) (290,881)
Total net deferred tax liabilities [1] (1,371) (1,410)
Non-current deferred tax assets 295 446
Non-current deferred tax liabilities (1,666) (1,856)
Deferred Tax Assets, Net, Total $ (1,371) $ (1,410)
[1] For US tax purposes, the LINE and Saguaro Acquisition transaction was considered an asset acquisition. Refer to Note 3, Acquisitions, for further information on this transaction.
v3.22.4
Income Taxes - Additional Information (Detail) - USD ($)
 12 Months Ended
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Dec. 15, 2022
Aug. 31, 2022
Jan. 01, 2022
Income Tax Contingency [Line Items]            
Tax losses $ 110,201,000 $ 118,890,000        
Interest limitation carryforward 66,866,000 73,422,000        
Valuation Allowance 216,114,000 174,265,000        
Reductions due to expiry of state of limitations 3,014,000 3,822,000 $ 1,356,000      
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense $ 0 $ 0        
Effective tax rate (2.00%) 0.00% 0.00%      
Effective Income tax rate reconciliation, foreign income tax rate differential, percent (0.00%) 0.00% 1.00%      
Change in tax rate $ 0 $ 3,566,000 $ 1,478,000      
Deferred Tax Assets, Increase in Valuation Allowance 70,000,000          
Deferred Tax Assets, Write-Off 27,000,000          
Deferred Tax Assets, Foreign exchange translation impact 1,000,000          
Increase decrease in net deferred tax assets, before valuation allowance 42,000,000          
Uncertain tax positions, liability 16,000,000 16,000,000 11,000,000      
minimum effective tax rate       15.00% 15.00%  
Excise Tax         1.00%  
US [Member]            
Income Tax Contingency [Line Items]            
Tax losses 67,000,000          
Interest limitation carryforward 40,000,000          
Tax losses not subject to expiration 225,000,000 238,000,000        
Interest limitation carryforward not to expire 0 0        
Valuation Allowance $ 102,000,000 $ 54,000,000 $ 62,000,000      
Effective Income tax rate reconciliation, foreign income tax rate differential, percent 21.00% 21.00% 19.00%      
US [Member] | Federal [Member]            
Income Tax Contingency [Line Items]            
Interest limitation carryforward $ 61,000,000 $ 69,000,000        
US [Member] | State [Member]            
Income Tax Contingency [Line Items]            
Interest limitation carryforward 187,000,000          
United Kingdom [Member]            
Income Tax Contingency [Line Items]            
Tax losses 19,000,000          
Interest limitation carryforward 27,000,000          
Tax losses not subject to expiration 19,000,000 35,000,000        
Interest limitation carryforward not to expire 27,000,000 50,000,000        
Valuation Allowance 90,000,000 $ 104,000,000 $ 59,000,000      
Trading Losses 29,000,000         $ 2,000,000
Reductions due to expiry of state of limitations $ 4,000,000          
Effective Income tax rate reconciliation, foreign income tax rate differential, percent 21.00% 21.00% 19.00%      
Rest of the World [Member]            
Income Tax Contingency [Line Items]            
Valuation Allowance $ 15,000,000 $ 8,000,000 $ 4,000,000      
Hong Kong [Member]            
Income Tax Contingency [Line Items]            
Tax losses 8,000,000          
Tax losses not subject to expiration 8,000,000          
Valuation Allowance $ 9,000,000 8,000,000 $ 6,000,000      
Maximum [Member] | US [Member] | Federal [Member]            
Income Tax Contingency [Line Items]            
Interest limitation carryforward   $ 185,000,000        
v3.22.4
Income Taxes - Summary of Unrecognized Tax Beneifts - Summary of Unrecognized Tax Beneifts (Details) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Income Tax Disclosure [Abstract]      
Beginning Balance $ 15,129 $ 11,293 $ 9,221
Additions related to the current year 5,359 3,948 1,996
Reductions due to expiry of state of limitations (3,014) (3,822) (1,356)
Change in tax rate 0 3,566 1,478
Foreign exchange 1,633 144 (46)
Ending Balance $ 15,841 $ 15,129 $ 11,293
v3.22.4
Segments - Additional Information (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Segment Reporting Information [Line Items]      
Operating Expenses $ (846,392) $ (507,735) $ (356,502)
Consolidated Segment Revenue 972,214 560,554 384,376
Other Expense [Member]      
Segment Reporting Information [Line Items]      
Covid-19 related charges     5,000
Project abandonment costs     7,000
Restructuring costs   2,000 6,000
General and Administrative Expense [Member]      
Segment Reporting Information [Line Items]      
Provision for loan, lease, and other losses     $ 5,000
Membership Credit [Member]      
Segment Reporting Information [Line Items]      
Operating Expenses $ 1,000 $ 8,000  
v3.22.4
Segments - Summary of Disaggregated Revenue (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Segment Reporting, Revenue Reconciling Item [Line Items]      
Consolidated revenue $ 972,214 $ 560,554 $ 384,376
Total segment revenue 1,017,488 592,576 414,923
North America [Member]      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Consolidated revenue 389,124 226,708 156,248
Total segment revenue 404,043 240,146 173,031
UK [Member]      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Consolidated revenue 299,929 173,499 126,106
Total segment revenue 307,629 179,587 129,246
Europe ROW [Member]      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Consolidated revenue 135,104 67,923 47,446
Total segment revenue 157,759 80,419 58,070
Reportable Segment [Member]      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Consolidated revenue 824,157 468,130 329,800
Total segment revenue 869,431 500,152 360,347
All Other [Member]      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Consolidated revenue 148,057 92,424 54,576
Total segment revenue 148,057 92,424 54,576
Membership Revenue [Member]      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Total segment revenue 283,679 198,081 186,722
Membership Revenue [Member] | North America [Member]      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Total segment revenue 139,636 94,746 98,478
Membership Revenue [Member] | UK [Member]      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Total segment revenue 76,603 59,722 54,765
Membership Revenue [Member] | Europe ROW [Member]      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Total segment revenue 31,485 22,074 22,884
Membership Revenue [Member] | Reportable Segment [Member]      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Total segment revenue 247,724 176,542 176,127
Membership Revenue [Member] | All Other [Member]      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Total segment revenue 35,955 21,539 10,595
In House Revenue [Member]      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Total segment revenue 447,631 227,843 133,151
In House Revenue [Member] | North America [Member]      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Total segment revenue 193,749 103,289 50,684
In House Revenue [Member] | UK [Member]      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Total segment revenue 166,016 88,987 53,563
In House Revenue [Member] | Europe ROW [Member]      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Total segment revenue 87,866 35,567 28,904
In House Revenue [Member] | Reportable Segment [Member]      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Total segment revenue 447,631 227,843 133,151
In House Revenue [Member] | All Other [Member]      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Total segment revenue 0 0 0
Other Revenue [Member]      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Total segment revenue 286,178 166,652 95,050
Other Revenue [Member] | North America [Member]      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Total segment revenue 70,658 42,111 23,869
Other Revenue [Member] | UK [Member]      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Total segment revenue 65,010 30,878 20,918
Other Revenue [Member] | Europe ROW [Member]      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Total segment revenue 38,408 22,778 6,282
Other Revenue [Member] | Reportable Segment [Member]      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Total segment revenue 174,076 95,767 51,069
Other Revenue [Member] | All Other [Member]      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Total segment revenue 112,102 70,885 43,981
Elimination Of Equity Accounted Revenue [Member]      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Consolidated revenue (45,274) (32,022) (30,547)
Elimination Of Equity Accounted Revenue [Member] | North America [Member]      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Consolidated revenue (14,919) (13,438) (16,783)
Elimination Of Equity Accounted Revenue [Member] | UK [Member]      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Consolidated revenue (7,700) (6,088) (3,140)
Elimination Of Equity Accounted Revenue [Member] | Europe ROW [Member]      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Consolidated revenue (22,655) (12,496) (10,624)
Elimination Of Equity Accounted Revenue [Member] | Reportable Segment [Member]      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Consolidated revenue (45,274) (32,022) (30,547)
Elimination Of Equity Accounted Revenue [Member] | All Other [Member]      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Consolidated revenue $ 0 $ 0 $ 0
v3.22.4
Segments - Summary of Reconciliation of Reportable Segment Adjusted EBITDA to Total Consolidated Segment Revenue (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]      
Total consolidated segment revenue $ 972,214 $ 560,554 $ 384,376
Total segment operating expenses (846,392) (507,735) (356,502)
Share of equity method investments adjusted EBITDA 7,577 4,662 3,563
Reportable segments adjusted EBITDA 133,399 57,481 31,437
Unallocated corporate overhead (43,522) (40,741) (31,211)
Consolidated adjusted EBITDA 89,877 16,740 226
Depreciation and amortization (99,930) (83,613) (69,802)
Interest expense, net (71,499) (84,382) (77,792)
Income tax (expense) benefit (5,131) (894) 776
Gain (loss) on sale of property and equipment 390 6,837 98
Share Of Loss Of Equity Method Investments 3,941 (2,249) (3,627)
Foreign exchange loss (gain), net (69,600) (25,541) [1] 3,354
Pre-opening expenses (14,081) (21,294) (21,058)
Non-cash rent (7,877) [2] (12,651) (15,627)
Deferred registration fees, net (924) (4,463) (1,149)
Share of equity method investments adjusted EBITDA (7,577) (4,662) (3,563)
Share-based compensation expense, net of tax (27,681) (26,660) (2,618)
Share-based compensation expense (22,675) [3]   (2,618)
Other expenses, net (14,694) [3] (25,882) (44,493)
Net loss (219,780) (268,714) (235,275)
North America [Member]      
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]      
Total consolidated segment revenue 389,124 226,708 156,248
Total segment operating expenses (318,375) (183,051) (131,444)
Share of equity method investments adjusted EBITDA 2,610 2,289 2,647
Reportable segments adjusted EBITDA 73,359 45,946 27,451
UK [Member]      
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]      
Total consolidated segment revenue 299,929 173,499 126,106
Total segment operating expenses (238,733) (145,293) (112,862)
Share of equity method investments adjusted EBITDA 1,142 760 132
Reportable segments adjusted EBITDA 62,338 28,966 13,376
Europe ROW [Member]      
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]      
Total consolidated segment revenue 135,104 67,923 47,446
Total segment operating expenses (127,702) (64,686) (50,677)
Share of equity method investments adjusted EBITDA 3,825 1,613 784
Reportable segments adjusted EBITDA 11,227 4,850 (2,447)
Reportable Segment [Member]      
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]      
Total consolidated segment revenue 824,157 468,130 329,800
Total segment operating expenses (684,810) (393,030) (294,983)
Share of equity method investments adjusted EBITDA 7,577 4,662 3,563
Reportable segments adjusted EBITDA 146,924 79,762 38,380
Consolidated adjusted EBITDA 89,877 16,740 226
Depreciation and amortization 99,930 83,613 69,802
Interest expense, net 71,499 84,382 77,792
Income tax (expense) benefit (5,131) (894) 776
EBITDA (43,220) (99,825) (88,457)
Gain (loss) on sale of property and equipment (390) (6,837) (98)
Share Of Loss Of Equity Method Investments (3,941) 2,249 3,627
Foreign exchange loss (gain), net 69,600 25,541 (3,354)
Pre-opening expenses [4] 14,081 21,294 21,058
Non-cash rent [5] 7,877 12,651 15,627
Deferred registration fees, net 924 4,463 1,149
Share of equity method investments adjusted EBITDA 7,577 4,662 3,563
Share-based compensation expense [6] 22,675 26,660 2,618
Other expenses, net [6],[7] 14,694 25,882 44,493
Net loss (219,780) (268,714) (235,275)
All Other [Member]      
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]      
Total consolidated segment revenue 148,057 92,424 54,576
Total segment operating expenses (161,582) (114,705) (61,519)
Share of equity method investments adjusted EBITDA 0 0 0
Reportable segments adjusted EBITDA $ (13,525) $ (22,281) $ (6,943)
[1] Includes the effect of a prior-period error correction, as discussed in Note 2, Summary of Significant Accounting Policies – Basis of Presentation.
[2] Includes the effect of a prior-period error correction, as discussed in Note 2, Summary of Significant Accounting Policies – Basis of Presentation.
[3] Other expenses, net includes share-based compensation and severance expense incurred related to the departure of the former Chief Operating Officer ($4 million) and another former employee ($1 million) of the Company of $5 million for fiscal year ended January 1, 2023. This balance is reported within Share-based compensation expense in the consolidated statement of operations for the fiscal year ended January 1, 2023.
[4] The entire balance of these costs is related to pre-opening activities for our Houses in each of the periods presented.
[5] The non-cash rent balance for the fiscal year ended January 1, 2023 includes the effect of a prior-period error correction, as discussed in Note 2, Summary of Significant Accounting Policies – Basis of Presentation.
[6] Other expenses, net includes share-based compensation and severance expense incurred related to the departure of the former Chief Operating Officer ($4 million) of the Company and former employee ($1 million) of $5 million for fiscal year ended January 1, 2023. This balance is reported within Share-based compensation expense in the consolidated statement of operations for the fiscal year ended January 1, 2023.
[7] Represents other items included in operating expenses, which are outside the normal scope of the Company’s ordinary activities or non-cash, including expenses incurred in respect of membership credits of $1 million and $8 million for the fiscal years ended January 1, 2023 and January 2, 2022, respectively. Other expenses, net also include IPO-related costs of $14 million and corporate financing and restructuring costs of $2 million incurred during the fiscal year ended January 2, 2022. For the fiscal year ended January 3, 2021, other expenses, net include COVID-19 related charges of $5 million, abandoned project costs of $7 million, corporate restructuring costs of $6 million, and the Soho Restaurants guarantee provision of $5 million (refer to Note 4, Consolidated Variable Interest Entities).
v3.22.4
Segments - Summary of Reconciliation of Reportable Segment Adjusted EBITDA to Total Consolidated Segment Revenue (Parenthetical) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]      
Other expenses $ 5,000    
Segment Operating Expenses (846,392) $ (507,735) $ (356,502)
Other expense include ipo related cost   14,000  
Membership Credit [Member]      
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]      
Segment Operating Expenses 1,000 8,000  
Other Expense [Member]      
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]      
Restructuring costs   $ 2,000 6,000
Covid-19 related charges     5,000
Project abandonment costs     7,000
General and Administrative Expense [Member]      
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]      
Provision for loan, lease, and other losses     $ 5,000
Chief Operating Officer [Member]      
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]      
Other expenses 4,000    
Former Employee [Member]      
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]      
Other expenses $ 1,000    
v3.22.4
Segments - Summary of Long-lived Asset Information By Geographic Area (Detail) - USD ($)
$ in Thousands
Jan. 01, 2023
Jan. 02, 2022
Segment Reporting Information [Line Items]    
Long-lived assets by geography $ 1,754,209 $ 1,705,573
United Kingdom [Member]    
Segment Reporting Information [Line Items]    
Long-lived assets by geography 509,221 571,716
North America [Member]    
Segment Reporting Information [Line Items]    
Long-lived assets by geography 901,505 806,617
Europe [Member]    
Segment Reporting Information [Line Items]    
Long-lived assets by geography 297,247 270,657
Non-US [Member]    
Segment Reporting Information [Line Items]    
Long-lived assets by geography $ 46,236 $ 56,583
v3.22.4
Related Party Transactions - Additional Information (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 01, 2023
Jan. 01, 2023
Jan. 02, 2022
Jan. 03, 2021
Jul. 19, 2021
Mar. 23, 2021
Jun. 30, 2019
May 03, 2019
Related Party Transaction [Line Items]                
Total revenues   $ 972,214 $ 560,554 $ 384,376        
Operating lease, right-of-use asset $ 1,085,579 1,085,579 996,991          
Operating lease, liability 1,249,076 1,249,076            
Operating leases, rent expense   $ 133,000 117,000 $ 110,000        
Lessee, operating lease, option to extend   multiple   This lease was extended for an additional 5 years in Fiscal 2021.        
Due to related parties, current 24,612 $ 24,612 21,661          
Raycliff Capital LLC [Member]                
Related Party Transaction [Line Items]                
Operating lease, right-of-use asset 21,000 21,000 23,000          
Operating lease, liability $ 22,000 22,000 22,000          
Operating leases, rent expense   $ 3,000 2,000          
Lessee, operating lease, term of contract 19 years 19 years            
Lease expiration date   Dec. 15, 2039            
Soho Works Limited [Member]                
Related Party Transaction [Line Items]                
Operating lease, right-of-use asset $ 85,000 $ 85,000 97,000          
Operating lease, liability $ 101,000 101,000 117,000          
Operating leases, rent expense   $ 10,000 11,000 $ 9,000        
Lessee, operating lease, term of contract 19 years 19 years            
Lease expiration date   Jul. 25, 2039            
Soho House Limited [Member]                
Related Party Transaction [Line Items]                
Interest free loan             $ 1,000  
Yucaipa Companies LLC [Member]                
Related Party Transaction [Line Items]                
Operating lease, right-of-use asset $ 17,000 $ 17,000 11,000          
Operating lease, liability $ 21,000 21,000   17,000        
Operating leases, rent expense   $ 2,000 3,000 3,000        
Lessee, operating lease, term of contract 20 years 20 years            
Due to related parties, current           $ 10,000    
Lease expiration date   Dec. 31, 2038            
Yucaipa Companies LLC [Member] | IPO [Member]                
Related Party Transaction [Line Items]                
Due to related parties, current         $ 9      
Soho Ludlow Tenant LLC [Member]                
Related Party Transaction [Line Items]                
Operating lease, right-of-use asset $ 8,000 $ 8,000 9,000          
Operating lease, liability 15,000 15,000 15,000          
Operating leases, rent expense   $ 1,000 1,000 10,000        
Lessee, operating lease, term of contract               22 years
Lessee, operating lease, option to extend   three additional five-year terms            
Lease expiration date   Apr. 20, 2041            
Ludlow Acquisition LLC [Member]                
Related Party Transaction [Line Items]                
Operating lease, right-of-use asset 29,000 $ 29,000 30,000          
Operating lease, liability $ 33,000 33,000 33,000          
Operating leases, rent expense   $ 4,000 4,000 4,000        
Lessee, operating lease, term of contract 25 years 25 years            
Ned-Soho House, LLP [Member]                
Related Party Transaction [Line Items]                
Management fee expense   $ 4,000 1,000 2,000        
Development fees   4,000 1,000 2,000        
Cost reimbursements   4,000 1,000 2,000        
Total revenues $ 1,000              
Ned New York [Member]                
Related Party Transaction [Line Items]                
Management fee expense   1,000 1,000 $ 1,000        
Line And Saguaro Hotels [Member]                
Related Party Transaction [Line Items]                
Management fee expense   8,000 2,000          
GHWHI, LLC [Member]                
Related Party Transaction [Line Items]                
Operating lease, right-of-use asset 65,000 65,000            
Operating lease, liability $ 69,000 $ 69,000            
Lessee, Operating Lease, Renewal Term 5 years 5 years            
Operating leases, rent expense   $ 5,000 1,000          
Lessee, operating lease, term of contract 25 years 25 years            
Remaining lease term 15 years 15 years            
Le Vallauris [Member]                
Related Party Transaction [Line Items]                
Operating lease, right-of-use asset $ 7,000 $ 7,000            
Operating lease, liability $ 7,000 7,000            
Operating leases, rent expense   $ 1,000            
Lessee, operating lease, term of contract 15 years 15 years            
Lease expiration date   Mar. 16, 2037            
Willows Historic [Member]                
Related Party Transaction [Line Items]                
Operating lease, right-of-use asset $ 14,000 $ 14,000            
Operating lease, liability $ 14,000 $ 14,000            
Lessee, operating lease, term of contract 15 years 15 years            
Lease expiration date   Sep. 14, 2037            
Soho House Design Services [Member]                
Related Party Transaction [Line Items]                
Fees received from affiliates   $ 15,000 1,000          
Cost received form affiliates   4,000 $ 1,000          
Soho House Stockholm [Member]                
Related Party Transaction [Line Items]                
Operating lease, right-of-use asset $ 28,000 28,000            
Operating lease, liability $ 28,000 28,000            
Operating leases, rent expense   $ 1,000            
Lessee, operating lease, term of contract 15 years 15 years            
v3.22.4
Related Party Transactions - Summary of Details Amounts Owed By (to) Equity Method Investees Due Within One Year (Detail) - USD ($)
$ in Thousands
Jan. 01, 2023
Jan. 02, 2022
Related Party Transaction [Line Items]    
Related Party Transaction, Due from (to) Related Party $ (3,489) $ (3,086)
Soho House Toronto Partnership [Member]    
Related Party Transaction [Line Items]    
Related Party Transaction, Due from (to) Related Party (1,015) (810)
Raycliff Red LLP [Member]    
Related Party Transaction [Line Items]    
Related Party Transaction, Due from (to) Related Party (4,169) (2,952)
Mirador Barcel S.L [Member]    
Related Party Transaction [Line Items]    
Related Party Transaction, Due from (to) Related Party 499 450
Little Beach House Barcelona S.L [Member]    
Related Party Transaction [Line Items]    
Related Party Transaction, Due from (to) Related Party 313 (203)
Mimea XXI S.L. [Member]    
Related Party Transaction [Line Items]    
Related Party Transaction, Due from (to) Related Party $ 477 $ 429
v3.22.4
Subsequent Events - Additional Information (Detail)
£ in Millions
 12 Months Ended
Mar. 03, 2023
Feb. 28, 2023
$ / shares
shares
Jan. 31, 2023
shares
Dec. 31, 2017
GBP (£)
Jan. 01, 2023
Jan. 02, 2022
Aug. 31, 2020
Feb. 28, 2019
Subsequent Event [Line Items]                
Debt Instrument, Interest Rate, Stated Percentage             4.00%  
Subsequent Event [Member] | Restricted Stock Units (RSUs) [Member] | Common Class A [Member]                
Subsequent Event [Line Items]                
Stock Issued During Period, Shares, Restricted Stock Award, Gross     317,013          
Subsequent Event [Member] | Stock Appreciation Rights (SARs) [Member]                
Subsequent Event [Line Items]                
Shares granted to certain senior employees   3,113,109            
Expirations in period, weighted average exercise price | $ / shares   $ 5.00            
Mortgages [Member]                
Subsequent Event [Line Items]                
Debt Instrument, Maturity Date       Sep. 29, 2023        
Long-Term Line of Credit | £       £ 40        
Mortgages [Member] | Subsequent Event [Member]                
Subsequent Event [Line Items]                
Debt Instrument Extended Maturity Date Sep. 29, 2024              
Soho House Holdings Limited [Member] | Mortgages [Member]                
Subsequent Event [Line Items]                
Debt Instrument, Maturity Date       Sep. 29, 2022        
Term Loan [Member] | Mortgages [Member]                
Subsequent Event [Line Items]                
Debt Instrument, Interest Rate, Stated Percentage               5.34%
Subordinated Debt [Member] | Mortgages [Member]                
Subsequent Event [Line Items]                
Debt Instrument, Interest Rate, Stated Percentage       7.00% 7.25% 7.25%   7.25%
Debt Instrument, Maturity Date         Feb. 06, 2024 Feb. 06, 2024