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Segments | 12 Months Ended
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Dec. 31, 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 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 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 Reportable segments 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 EBITDA, share-based compensation expense and certain other expenses. The following tables present disaggregated revenue for the fiscal years ended December 31, 2023, January 1, 2023, and January 2, 2022 and the key financial metrics reviewed by the CODM for the Company’s reportable segments:
|  | For the Fiscal Year Ended December 31, 2023 |
(in thousands) |  | North America |  |  | UK |  |  | Europe & ROW |  |  | Reportable Segment Total |  |  | All Other |  |  | Total |
Membership revenues |  | $ | 177,267 |  |  | $ | 104,387 |  |  | $ | 45,648 |  |  | $ | 327,302 |  |  | $ | 46,914 |  |  | $ | 374,216 |
In-House revenues |  |  | 203,083 |  |  |  | 182,363 |  |  |  | 122,359 |  |  |  | 507,805 |  |  |  | — |  |  |  | 507,805 |
Other revenues |  |  | 76,066 |  |  |  | 71,451 |  |  |  | 43,982 |  |  |  | 191,499 |  |  |  | 114,185 |  |  |  | 305,684 |
Total segment revenue |  |  | 456,416 |  |  |  | 358,201 |  |  |  | 211,989 |  |  |  | 1,026,606 |  |  |  | 161,099 |  |  |  | 1,187,705 |
Elimination of equity accounted revenue |  |  | (15,411 | ) |  |  | (7,686 | ) |  |  | (28,729 | ) |  |  | (51,826 | ) |  |  | — |  |  |  | (51,826 | )
Consolidated revenue |  | $ | 441,005 |  |  | $ | 350,515 |  |  | $ | 183,260 |  |  | $ | 974,780 |  |  | $ | 161,099 |  |  | $ | 1,135,879 |
|  | 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 December 31, 2023 |
(in thousands) |  | North America |  |  | UK |  |  | Europe & ROW |  |  | Reportable Segment Total |  |  | All Other |  |  | Total |
Total consolidated segment revenue |  | $ | 441,005 |  |  | $ | 350,515 |  |  | $ | 183,260 |  |  | $ | 974,780 |  |  | $ | 161,099 |  |  | $ | 1,135,879 |
Total segment operating expenses |  |  | (366,328 | ) |  |  | (232,632 | ) |  |  | (177,154 | ) |  |  | (776,114 | ) |  |  | (170,967 | ) |  |  | (947,081 | )
Share of equity method investments EBITDA |  |  | 3,036 |  |  |  | 1,239 |  |  |  | 5,044 |  |  |  | 9,319 |  |  |  | — |  |  |  | 9,319 |
Reportable segments EBITDA |  |  | 77,706 |  |  |  | 119,122 |  |  |  | 11,150 |  |  |  | 207,985 |  |  |  | (9,868 | ) |  |  | 198,117 |
Unallocated corporate overhead |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (38,576 | )
Consolidated Segmental EBITDA |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 159,541 |
Depreciation and amortization |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (111,403 | )
Interest expense, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (84,136 | )
Income tax expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (10,811 | )
Gain (loss) on sale of property and other, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (1,038 | )
Share of income of equity method investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,900 |
Foreign exchange |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 36,196 |
Pre-opening expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (18,604 | )
Non-cash rent(1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (7,621 | )
Deferred registration fees, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,855 |
Share of equity method investments EBITDA |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (9,319 | )
Share-based compensation expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (20,230 | )
Loss on impairment of long-lived assets(2) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (47,455 | )
Other expenses, net(3) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (5,963 | )
Net loss |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | (117,088 | )
(1) Includes the effect of a prior-period error correction, as discussed in Note 2, Summary of Significant Accounting Policies – Basis of Presentation. (2) During fiscal 2023, the Company recognized $47 million of impairment losses on long-lived assets (comprised of $33 million in respect of Operating lease assets and $14 million of Property and equipment, net), of which $37 million is in respect of Soho Works North America. (3) In November 2023, the Company entered into a 10-year licensing agreement with a third party to manufacture and distribute the Company’s Cowshed brand, commencing January 1, 2024. This agreement has restricted the Company’s ability to sell certain inventories it acquired prior to entering into the agreement. As such, the Company has provided in full for the $5 million of inventory it is unable to recover as a result of the entering into the agreement. This is presented within other, net in the consolidated statement of operations for Fiscal 2023.
|  | 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 EBITDA |  |  | 2,610 |  |  |  | 1,142 |  |  |  | 3,825 |  |  |  | 7,577 |  |  |  | - |  |  |  | 7,577 |
Reportable segments EBITDA |  |  | 73,359 |  |  |  | 62,338 |  |  |  | 11,227 |  |  |  | 146,924 |  |  |  | (13,525 | ) |  |  | 133,399 |
Unallocated corporate overhead |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (43,522 | )
Consolidated Segmental 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 loss 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 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 related to the correction of the estimation of the historical operating lease liabilities. The error resulted in the overstatement of operating lease expenses, with a cumulative impact of $5 million for Fiscal 2021. The correction of this cumulative error is presented within In-House operating expenses in the consolidated statement of operations for Fiscal 2022. (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 EBITDA |  |  | 2,289 |  |  |  | 760 |  |  |  | 1,613 |  |  |  | 4,662 |  |  |  | - |  |  |  | 4,662 |
Reportable segments EBITDA |  |  | 45,946 |  |  |  | 28,966 |  |  |  | 4,850 |  |  |  | 79,762 |  |  |  | (22,281 | ) |  |  | 57,481 |
Unallocated corporate overhead |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (40,741 | )
Consolidated Segmental EBITDA |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 16,740 |
Depreciation and amortization |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (83,613 | )
Interest expense, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (84,382 | )
Income tax benefit |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (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 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. The error relates to the correction of a consolidating adjustment for foreign currency transaction gains of $13 million in the fiscal year ended January 3, 2021 and $4 million in the fiscal year ended December 29, 2019. The correction of this error is presented within other in the consolidated statement of operations for the fiscal year ended January 2, 2022 and within foreign currency translation adjustment in the consolidated statement of comprehensive loss for the fiscal year ended January 2, 2022. going conc 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 December 31, 2023 and January 1, 2023. Asset information by segment is not reported internally or otherwise regularly reviewed by the CODM.
|  | As of |
(in thousands) |  | December 31, 2023 |  |  | January 1, 2023 |
Long-lived assets by geography |  |  |  |  |  |
North America |  | $ | 877,071 |  |  | $ | 901,505 |
United Kingdom |  |  | 556,628 |  |  |  | 509,221 |
Europe |  |  | 317,502 |  |  |  | 297,247 |
Asia |  |  | 47,694 |  |  |  | 46,236 |
Total long-lived assets |  | $ | 1,798,895 |  |  | $ | 1,754,209 |
Following the Company's impairment review in fiscal 2023, the Company recognized $47 million of impairment losses on long-lived assets comprised of $33 million in respect of Operating lease assets and $14 million of Property and equipment, net. The long-lived assets presented by geography above include $39 million, $6 million and $2 million of impairment losses in North America, United Kingdom and Asia, respectively.

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