When Rapha was bought last year by bike-mad heirs of the Walmart empire it was assumed to be a vanity purchase, but job cuts at the high-end apparel firm suggest the new owners also want the hip brand to make more money. The Telegraph is reporting that up to 80 staff have been made redundant, but Rapha says the figure is closer to 15.
The redundancy programme is said by Rapha to be part of an initiative to "reduce costs, and consolidate and strengthen our position" and put the firm on a path towards "long-term profitable growth."
Rapha’s chief financial officer Emilio Foa recently left the company. One of those to have left the company includes R&D head Simon Huntsman.
Rapha customers have always received sales emails to buy discounted end-of-line items, but the discounts were deeper in the summer, and, in a move that would have been considered anathema to the brand in its formative years, some items have been spreading on Sportpursuit, a "members only" sale website.
Rapha was acquired by investment vehicle RZC last August. The sale price was reported to be £200 million, twenty times the annual profits. RZC was founded by two members of the billionaire Walmart dynasty, Steuart and Tom Walton, both grandsons of Sam, the retailer’s founder. They are passionate mountain bikers – through their love of cycling the Walton Family Foundation contributed $13 million toward MTB trails in Northwest Arkansas.
“For me riding a bike is about the most fun you can have,” said Tom Walton in 2016. “It’s something that allows you to stay mobile throughout your life. I don’t think of mountain biking as exercise. It’s about going out and having fun.
He added: "Cities need to include safe streets and make it possible for kids to get around without their parents driving them all the time."
RZC Investments owns Allied Cycle Works, a manufacturer of American-made carbon fibre bicycle frames.
Rapha was founded in 2004 by design consultant Simon Mottram.
At the time of the sale to RZC, Mottram said: "This … heralds the start of the next stage of our journey and is testament to the growth and potential that people see in Rapha and in cycling. The arrival of RZC Investments as a shareholder means we can pursue our mission to elevate cycling as a global sport and recruit more participants by engaging them and enabling them to ride with us at all levels.
"Support from RZC Investments will allow us to further expand our active global community of cyclists, develop even better and more innovative products and services to enhance cyclists’ lives and inspire many more people to take up the World’s greatest sport."
Steuart Walton said:
"Rapha represents the very best in the world of cycling. Our investment demonstrates our enthusiasm for its quality products, amazing community of cyclists and customers and its strong future. Rapha’s strategic vision has set the company on a path of tremendous growth and opportunity. We’re excited to be part of this next chapter by bringing the best sport in the world to more people in more ways and places."