Rapha swung to loss ahead of buyout
Cycling brand Rapha may have seemed to be riding high a few months ago when it was bought by Walmart heirs Steuart and Tom Walton, but it has been struggling in recent periods and posted a £20 million loss in its latest set of accounts.
The figures, covering the six months to January 2018, were a sharp contrast to the previous year when pre-tax profit was £1.4 million. Revenue in that previous 12 months was up almost 40% to £67.1 million but while the sales in the latest six month advanced to £42.2 million, it still made a loss.
Does that explain the reason why the company was put up for sale? Maybe. But even with the pre-tax loss that potential bidders would have been informed about, the business was still in high demand.
The Waltons’ RZC Investments had to fight off Investindustrial (which controls Aston Martin) and Weight Watchers owner Invus to win the Rapha prize.
Yet this summer, that prize looked far less desirable as the company cut costs and axed around 80 jobs, as well as launching several price cut campaigns during a season when demand for cycling products is usually at its highest. The company’s CFO has also departed.
The latest set of accounts showed that RZC paid £156 million for the brand that had been founded by Simon Mottram in 2004. He remains in charge.
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