Support road.cc

Like this site? Help us to make it better.

news

Rapha chief executive Simon Mottram to step down after 17 years

Business’s founder will remain “very close to the brand” and sit on its board, with ex-AllSaints CEO William Kim replacing him

Rapha chief executive Simon Mottram is to step down from the role 17 years after he founded the North London-based high-end clothing and accessories brand, although he will continue to sit on its board. He will hand over the reins to William Kim, former CEO of UK-based fashion retailer, AllSaints.

In an email sent to members of Rapha Cycling Club, among others, the 55 year old said that he would step down from the role in the new year, “but will remain very close to the brand. I will continue to serve on the Rapha Board of Directors and will continue to play a role as Founder.

“Just as importantly, I will continue to ride my bike with the same passion that led me to establish Rapha in the first place, as I worked to give cycling the inspiring and visionary force that it so richly deserved.

“As I step down, I will be handing over the leadership of the company to William Kim,” he continued. “William is a Korean American who has worked at amazing brands like Gucci, Burberry and AllSaints over the last three decades.

“This is clearly a very important step for me and for Rapha but I am convinced that it is the right time for me to step down and for Rapha to have a new CEO with the skills and experience to take advantage of the huge opportunity Rapha faces.

“William is equally as passionate as I am about the Rapha brand and our opportunity to inspire the world to live life by bike,” he added.

Mottram, who previously worked in brand consultancy, set up Rapha in 2004 and by the time it was sold in 2017 for a reported £200 million to an investment vehicle owned by Steaurt and Tom Walton, who are among the heirs to the Wal-Mart grocery fortune, it had annual sales of £63 million, 20 local websites worldwide selling clothing and accessories, plus 17 Clubhouses internationally.

Since its foundation, the brand has built up a loyal following around the world, reinforced by the Rapha Cycling Club whose more than 20,000 members regularly meet up for group rides and other activities in cities around the globe.

 In accounts for the year ended 31 January 2021 filed at Companies House earlier this year, parent company Carpegna limited revealed that sales had increased by nearly a third from £74 million to £98 million.

Earnings before interest, tax, depreciation and amortisation stood at £13 million compared to a loss of £1 million the previous year, and the company’s operating loss narrowed from £21 million to £4 million.

“Online operations performed well during the COVID-19 pandemic with strong revenue growth and new customer acquisition,” the company said.

“Marketing operations focused on making the Rapha brand more visible and engaging to cyclists which combined with a steady stream of new product launches resulted in increased demand.

“There were also market forces to consider. Quieter roads and limited spending choices encouraged a significant number of consumers to take up cycling and purchase bikes during lockdown.

“Rapha Clubhouses globally were impacted during the year by the COVID-19 pandemic,” the company continued.

“Government enforced closures and lockdowns resulted in stores being closed for varying periods of time,” it said (the London clubhouse, for example, was closed from March last year through April this year).

“This impacted revenue in the financial period although demand bounced back well as stores reopened. The Clubhouse channel contributed 16 per cent of total sales in the year,” the company added, compared to 24 per cent in the previous year, before the COVID-19 pandemic struck.

Simon joined road.cc as news editor in 2009 and is now the site’s community editor, acting as a link between the team producing the content and our readers. A law and languages graduate, published translator and former retail analyst, he has reported on issues as diverse as cycling-related court cases, anti-doping investigations, the latest developments in the bike industry and the sport’s biggest races. Now back in London full-time after 15 years living in Oxford and Cambridge, he loves cycling along the Thames but misses having his former riding buddy, Elodie the miniature schnauzer, in the basket in front of him.

Add new comment

4 comments

Avatar
@soundtrooper | 2 years ago
0 likes

Rapha's value was grately inflated prior to attracting the new owners, this was a delibrate tactic. The top line sales where driven by a cycle of heavy discounting on product where the margins where already quite thin erroding the small amount of EBITDA the company made. This made a rod for the new owners back. They have broken out of the cycle of discounting now, but the discounting was driving topline sales and customer aquistion, this is huge no no in premium retailing. Also the operations of Rapha have always been very poor, especially the supply chain and logistcs side of things (the custom programme being the prime example) Product designs where constantly late to the manufacturer and product was late delivered and with defects far more often than you would think. Therefore the margin on the product is far lower than you would expect for a premium brand. The execitives got their pay day from the sale and deservedly so for Simon who poured everything into the brand, others where not so deserving and caused a lot of the problems I spoke of above. I wouldn't say the new owners bought a dud, but a change in leaderhsip was ineviatble and hopefully the new CEO can focus on putting the operations right once and for all and clear out the remaining dead wood in the head office team... I wish Simon all the best, he's surely earned the right to relax and enjoy riding his bike more...

Avatar
Freddy56 | 2 years ago
1 like

Rapha have lost $65 million in the last 4 years. They didn't turn a profit durting covid bike boom, perhaps the only bike company not to do so.... Therefore, did he go or was he not 'eased' out?

I am a Rapha fan and hope it won't change too much with Sir Mottram's disparture, but as a business it is not sustainable.

Avatar
wycombewheeler replied to Freddy56 | 2 years ago
0 likes

ebit is £13m, so if the company is not making a profit it is down to interest payments, presumably interest on finance used to buy the company.

Avatar
Awavey replied to Freddy56 | 2 years ago
0 likes

but Id suggest it needs to change, whilst you dont want it to lose its identity, which may well be something tied in too much with Simon Mottram if he does eventually decide to pursue other opportunites, I dont think its unfair to say on those figures, what they are doing isnt working for them

Latest Comments