Buy your local McKinsey guy a drink this weekend
Things are looking a little scary over at 3 WTC.
Good morning everyone.
Today’s letter includes:
A conversation about injectable moisturizer that I had with
, my brilliant estheticianKendall Jenner’s surprising career influence (Da**d Por**oy)
Responses to yesterday’s letter about Puck and AirMail
HERE YOU GO:
“Eerily similar to WeWork’s public offering, we believe Soho House will eventually meet the same fate as the now defunct co-working space.” Shares in Soho House fell as much as 30% after a short-seller said that the stock price of the luxury hotel and members’ club operator should fall to zero. I linked the short report so you can read it (the language is scathing, including diagrams that point to a “clusterfuck of data”). GlassHouse and the authors of the report disclosed holding short positions as well as put options in Soho House. Soho House has struggled to capture investor enthusiasm with shares trading more than 60% below the company’s July 2021 initial public offering price of $14. Soho House’s market value fell below $1 billion Wednesday. It was worth nearly $3 billion at its peak. Here’s what else the short report said:
Concerns about crowding → drop in service: “Members also raised concerns about a decline in service quality at Soho House properties. Reports suggest that rapid member expansion may be stretching the company's operational capabilities thin, leading to longer wait times, reduced personalized attention and an overall diminishing standard of service. As a result, the company recently halted new memberships at some of its prime locations.”
Too many Common Projects and bad startup ideas: “When I went there, it didn’t have the right feel anymore. It has always been a creative, friendly place with a relaxed feel. If there are too many corporate types around, then that atmosphere doesn’t occur.”
Broken business model: “Soho House's ambitious growth strategy, including plans to expand into less affluent cities, is working against the company as it loses its exclusive appeal. If this company could not successfully produce a profit in cities like London, New York, and Miami, how does it expect to earn one in less affluent ones such as Portland and Sao Paulo?”
Tesla is reportedly asking managers to identify which roles are most important in a sign layoffs may be coming. Coming from someone who witnessed this at Meta in 2022, layoffs are for sure coming. Tesla has performance reviews twice a year, but salaried workers are only eligible for a promotion or bonus once a year, four workers told Business Insider. The company said on its website it rates employees on a scale of one to five.
McKinsey has warned 3,000 consultants that their performance was unsatisfactory and will need to improve. So if you see some boys looking really stressed at The Spaniard this weekend, consider this news.
Kendall Jenner is taking a page out of Portnoy’s playbook. “I got a text during class today that was like I think Kendall Jenner is going to be at Paloma tonight,” said one UGA student. “Me and my friends had no plan so we were like, why not?” God, I love college students. The tequila founder has embarked on a fully Barstool-inspired college tour to promote 818 at campus bars and by crashing pregames at frat houses (honestly…fun). Based on the comments, she might be spending a lot more time around crop tops, Zyn, and bad Chainsmokers playlists. The whole thing feels very 2014 in a good way.
