United States securities and exchange commission logo
April 30, 2021
Humera Afzal
Chief Financial Officer
Membership Collective Group Inc.
515 W. 20th Street
New York, New York 10011
Re: Membership
Collective Group Inc.
Draft Registration
Statement on Form S-1
Amendment No. 1
Submitted on April
7, 20201
CIK No. 0001846510
Dear Ms. Afzal:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form S-1 submitted April 7, 2021
General
1. Please explain
references to profits such as "growing profit sustainably" (p. 9), "our
profitable
international expansion" (p. 10), "SoHo House drives the majority of our
profit" (p. 80), in
light of the net losses to date.
2. Please fill in the
summary compensation table, as required by Item 402 of Regulation S-K,
and disclose whether
the executive compensation will change as a result of becoming a
public company. If so,
please discuss. Please also fill in the beneficial ownership table as
required by Item 403 of
Regulation S-K.
Humera Afzal
FirstName LastNameHumera
Membership Collective Group Afzal
Inc.
Comapany
April NameMembership Collective Group Inc.
30, 2021
April 230, 2021 Page 2
Page
FirstName LastName
3. We note the table on pages 5, 83 and 124 reflects total membership.
Please provide
separately the SoHo House Members for the same periods.
Predecessor, page iii
4. We note that immediately prior to the consummation of this offering,
certain existing
stockholders of Soho House Holdings Limited will exchange their equity
interests in Soho
House Holdings Limited for a number of shares of Class A common stock
or Class B
common stock of Membership Collective Group Inc. Please provide us
with your detailed
analysis of how you will account for this transaction. Please cite the
applicable accounting
guidance in your response.
5. In addition to the above, please tell us what consideration you gave
to providing pro forma
financial statements reflecting the transaction.
Risk Factors, page 30
6. We note the disclosures on page 114 and F-12 about the financial
statements being
prepared assuming the company will continue as a going concern. Please
add a risk
factor.
Non-GAAP Financial Measures, page 100
7. We note that your adjusted EBITDA measure includes an adjustment for
other expenses,
net, which represents operating expenses that are outside the normal
scope of your
ordinary activities or non-cash items. Please expand your discussion
in footnote (4) to
provide further details on the expense items included in this
adjustment. For example, for
fiscal year ended January 3, 2021, you only provide an explanation for
$13,369 of the
$27,766 total adjustment amount.
Business, page 121
8. We note the statement on page 127 that "our Membership Revenues have
grown from
19% of Total Revenues in fiscal 2016 to 46% of Total Revenues in
fiscal 2020
representing a 24% CAGR over that time period." It appears that the
46% for 2020 is due
to the significant decrease in in house and other revenues due to
Covid-19, rather than a
sustainable growth in revenues as a percent of total revenues. Please
revise to clearly
disclose the impact of Covid-19 on this figure.
9. We note the disclosure on page 129 that you "target stabilized average
revenues of
$20 million to $30 million, House-Level Contribution Margins of 20% to
30% and cash-
on-cash returns in excess of 50% once membership reaches a level that
we consider
normalized based on the size of the House." Please clarify whether you
have achieved
these targets as it relates to any of your Houses and if so, whether
such results have been
sustained and how these targets reconcile with results to date. Please
also clarify these
figures in light of the net losses and negative cash flow from
operations to date.
Humera Afzal
Membership Collective Group Inc.
April 30, 2021
Page 3
10. We note the statement on page 136 that typically applicants who are
offered membership
from the waitlist accept. Please clarify the percent of wait list
applicants that become
members.
11. Please revise the disclosure on page 138 to add disclosure about the
average daily
occupancy rate and average room rate for the fiscal 2020. Also, clarify
whether these
figures include the two stand alone hotels referenced on page 142.
Certain Relationships and Related Party Transactions, page 168
12. Please identify the owner with whom GHWHI LLC is affiliated. Please
identify the
owners who had previously provided the company with 19 million in
loans. Please
identify the owners of the company who are also owners of Quentin
Partners Limited.
Please identify the owner whose family member runs Sevengage Limited and
identify the
family member. See Item 404(a)(1) of Regulation S-K.
Index to Consolidated Financial Statements, page F-1
13. Please revise to include the audited financial statements of Membership
Collective Group
Inc., the registrant, or tell us why you believe their exclusion is
appropriate. Refer to Rule
3-01(a) of Regulation S-X.
Item 15. Recent Sales of Unregistered Securities, page II-2
14. Please provide the disclosure required by Item 701 of Regulation S-K for
the past three
years. We note the Consolidated Statements of Changes in Redeemable
Shares and
Shareholders Deficit Table reflect issuances of class A and C
ordinary shares. We also
note the share based compensation discussed in footnote 14 and the
convertible preference
shares in footnote 23.
You may contact William Demarest at 202-551-3432 or Isaac Esquivel at
202-551-3395
if you have questions regarding comments on the financial statements and
related
matters. Please contact Pam Howell at 202-551-3357 or Brigitte Lippmann at
202-551-
3713 with any other questions.
Sincerely,
FirstName LastNameHumera Afzal
Division of
Corporation Finance
Comapany NameMembership Collective Group Inc.
Office of Real
Estate & Construction
April 30, 2021 Page 3
cc: Robert A. Ryan, Esq.
FirstName LastName