Rapha has closed its US office and made staff redundant as part of a sudden “realigning” due to “current market dynamics” and to “better reflect our strategic priorities”.
The news was broken by Velo, the clothing brand laying off six of the eight employees who worked at its Bentonville office in Arkansas, one of the remaining two employees to move to a different role in the company and the other to continue, working remotely.
According to Rapha’s CEO Francois Convercey: “We are realigning Rapha to better reflect our strategic priorities and current market dynamics. Over the past five years, Rapha has experienced significant growth and these recent changes will focus us on accelerating towards our purpose of inspiring the world to live life by bike.
“Organisational changes are always challenging, and I want to extend my gratitude to everyone at Rapha for their hard work — we will do everything we can to support those affected by the organisational changes. US roles in Bentonville were impacted due to the consolidation of resources in London, but NWA [Northwest Arkansas] will remain the home of our North American Headquarters.”
A former employee, who gave their account anonymously, said they were “terminated for non-performance reasons” upon arriving at work on Wednesday, the Bentonville office which has been in operation since 2020 to close with the job cuts. The latest redundancies follow similar cuts in 2018 and last September, Rapha’s last annual accounts showing that it had posted a loss for the sixth year running, the one reported in November amounting to £12 million.
It has been reported that half a dozen customer service roles were cut at the US office in September, including the manager of the department. Rapha said its clubhouses will be unaffected by the redundancies and office closure.
In February 2023, the premium cycling clothing business underwent a refinancing operation to write off debt, the news coming as Rapha claimed it had “far outperformed” rivals in 2022.
Its figures for that year in question, up to 29 January 2023, showed that the brand posted a pre-tax loss of £12 million as it cited a downward trend in customer interest due to the cost of living crisis as well as overhead costs due to commitments made during the pandemic.
After tax the loss figure was £10.6 million, the sixth consecutive year the brand is in the red, however an independent auditor said that it had not identified “material concerns” that could cast any “significant doubt” over Rapha’s future, at least for the next twelve months from when the financial documents were issued.
In a statement shared at the time, Rapha CEO Convercey said: “Our financial results highlight the impact of a turbulent few years and the ongoing challenges faced by the business, and the cycling industry as a whole. Despite a negative profit year, through strategic decision making around reducing overhead costs, leadership changes and doubling down on our mission to ‘inspire the world to live life by bike’, I’m confident in our ability to navigate the current economic climate and make the right decisions to see improved performance.
“During the recent period, Rapha witnessed a return of customer demand levels closer to the long-term average growth trend. This followed two exceptional periods driven by the COVID-19 pandemic and subsequent lockdowns, which significantly boosted the demand for sporting goods, including cycling apparel.
“However, concerns over the cost of living have started to impact consumer confidence in certain markets. Additionally, the market has become more competitive as competitors, both direct and indirect, strive to normalise their supply chains after the disruptions caused by the pandemic.
“Despite the challenges faced, Rapha has undoubtedly emerged stronger, retaining many customers who initially joined during the pandemic while also acquiring new ones. The company’s revenue growth and customer base have remained resilient, holding up well against the record levels achieved during the height of the pandemic.”
Rapha is far from the only cycling industry brand to be feeling the pinch post-Covid, the world’s largest components manufacturer Shimano this week reporting a huge fall in sales for the first three months of 2024, down a quarter on the same period last year, when sales were also down 17 per cent on 2022 levels.
Last month, Giant predicted continued short-term “challenge” for bike industry as it revealed profits were almost halved and sales were down 16 per cent last year.
The last few years have brought redundancies across the cycling industry, Zwift’s co-CEO resigning in February as more job losses were felt at the virtual training app, following on from around 150 staff being let go in May 2022 before a further 80 jobs were cut last March, the second round of redundancies accounting for around 15 per cent of the workforce.
In January, Raleigh confirmed redundancies and restructuring as it announced it would be leaving its Nottingham headquarters, a “very difficult decision” made by parent company Accell.
Redundancies have also been made at Strava, Wahoo, British Cycling and other names and brands.
21 thoughts on “Rapha makes redundancies as US office closes in “realigning” of business due to “current market dynamics””
If they lost money during the
If they lost money during the covid boom- the model is broken.
Over 120million loss since the foundation. HOW!?
Assuming alot of that
Assuming alot of that historical loss is accounting losses.
But why they’re losing money now is simple, just look at the product they’re offering.
Their kit design is bland, uninventive and the quality has decreased, though prices rock solidly high.
Even when they create something like the EF Flanders kit, you can’t buy that, just their poorer designed Rapha version.
And they’ve moved into sports leisurewear thinking their brand alone justifies price tags north of 80 quid for generic khaki/navy clothing that looks identical to stuff you can get from Primark for less than a tenner.
Freddy56 wrote:
That surprises me too given the amount of Rapha kit I see being worn.
Can’t agree with stonojnr’s remarks. I have a few pieces of Rapha kit, and some off-bike clothing. It’s all very nicely made and I’ve worn it loads.
I can’t imagine buying from Primark, their stuff is terrible throwaway waste. There is no comparison.
Miller wrote:
All that glisters…there’s an awful lot of fake Rapha kit available, not got any myself but from the photographs online it looks pretty indistinguishable from the real thing.
I’m no MBA type but losses
I’m no MBA type but losses can be set against future gains to reduce tax bills. Creative accounting with profits buying assets eg spend on business assets rather than declare as profits, because an asset is not a gain or a loss until sold?
Or if losses in one arm of a business can offset tax elsewhere (not sure), well, they’re owned by Walmart so it may be tricky to unravel.
All I’m saying is they might be not as financially daft as, and have product that’s more in demand than many think.
Rapha claimed it had “far
Rapha claimed it had “far outperformed” rivals in 2022.- this is why I can’t like the brand; Lost 12 million and pointing at others to distract.
Bugger! I guess I’ll have to
Bugger! I guess I’ll have to squeeze another year out of my highly unfashionable MTB top that I paid a tenner for 25 years ago! #scrooge.
“We are realigning Rapha to
“We are realigning Rapha to better reflect our strategic priorities and current market dynamics” – what an utter bol***ks way of saying we’re making a loss and our business model isn’t working (ie a lot of years of posting losses).
They’re not losses – they’re
They’re not losses – they’re “negative profits”!
I know they class themselves
I know they class themselves as a premium brand, so that’s how they justify £175 for a jersey etc. but I’ve bought very good quality stuff from the likes of Galibier for a fraction of the cost. I’ve never bought it, but is their stuff that much better than others?
it used to be, obviously
it used to be, obviously opinions differ. But the stuff they sold a decade ago, absolutely was very good quality stuff, it felt quality too,and lasted.
thesedays it just feels average, looks average too, but theyre still charging the premium for it.
and you can spend as much, or more in some cases on premium quality kit, the likes of Assos and Maap arent losing money on the scale of Rapha, so its not about suddenly theres no market for premium kit out there, people are still spending money theyre just choosing other brands to spend with
How on earth can you sell
How on earth can you sell £100 plastic t-shirts made in China for a loss?
By employing a bit too many
By employing a bit too many “brand” and “lifestyle” type people in the west at highish pay?
Feel sorry for those affected, but… luxuries get cut first. 🙁
I have plenty of rapha kit –
I have plenty of rapha kit – its always well made and some of it has lasted years, way beyond some other generic brands. Currently though I found the items to be abit bland and they seem to have forgotten who their buying audience is. It is not your 20 year old looking peed off with life (as per their current models on their website) but mostly upper 30’s and above with cash to spare that like nice kit and to look good on a bike. So advertising the same kit as last year unfortunately doesnt cut it anymore (sad I know but if your spending £100 plus on a jersey you want something different from the crowd)
I feel the same. What started
I feel the same. What started out as a brand image evoking the golden age of cycling now feels like a forced DEI campaign. In an attempt to appear gritty and street the photos and art direction feel smug and pretentious. It is clear they wanted to avoid the trap of a brand associated with mamls, but in doing so have created a joyless, unaspirational brand as of late.
I always that it came across
I always thought that it came across as fake and not very nice.
I’ve owned one piece of Rapha
I’ve owned one piece of Rapha kit, my first ever set of bibs bought with my REI points, on sale, plus 20% discount, so I paid less than half price. I quite liked them, but I absolutely shredded them on a fall during a bikepacking trip, probably the third time I had worn them.
I bought a set of Bontrager bibs at a bike shop that day to finish the trip, and the Rapha did seem much nicer overall.
It’s mostly great kit thats
It’s mostly great kit thats far better than the alternatives I’ve tried – both of a similar price point and a lot lower.
The whole cycling industry is utterly f**ked at the moment, I’ve taken a step back a bit the last couple of years and every time I come back on this site more brands seem to have gone under or are in trouble.
Fingers crossed it’s a temp thing
I’ve been really happy with
I’ve been really happy with my Rapha cycling stuff – mainly the cheaper end as core is more than sufficient. The colours recently have been very weird though. Greys, mushroom, etc. All rather boring.
The off bike sufff is where it’s ridiculous. The price for a simple t shirt or hoodie is super high. Surely if more people wore it when not riding it would help advertise the brand?
I popped into the London store recently and whilst the cafe was great the clothing range was rather minimal. I’m assuming they make more money on coffee than cycling gear.
As for comment, a
Asked for comment, a representative of the biker community said: “We are realigning our expenditure, to better reflect our strategic priorities and the current income dynamics. As such, partnering with Rapha was something we had to reasses. I’m confident that we can find something else to wear while biking that doesnt leave us having to scrounge for food.”
Gotta hand it to Simon
Gotta hand it to Simon Mottram – sold off this ASSOS-wannabee created out of thin-air to the Sprawl-Mart heirs just before the jig was up! Marketing-maven bullspeak doesn’t work forever..