As many as 80 jobs may have been cut at Rapha’s London headquarters this week as part of a search for long-term profitable growth, according to reports in The Telegraph.
Rapha officially claimed that 15 jobs were cut as part of a redundancy programme to ‘reduce costs, and consolidate and strengthen our position’. However according to TheTelegraph, insiders claim that the numbers are around 60-70, with one source suggesting as many as 80 staff have been let go.
Rapha recently closed its print publication Mondial (which is now digital only), and there are rumours of further business transformations in the coming months. Rapha’s chief financial officer Emilio Fao has also recently left the company.
Premium cycling clothing brand Rapha was sold for £200m last year to RZC Investments, owned by Steuart and Tom Walton, who are the grandchildren of Walmart founder Sam Walton. The purchase was the result of bidding war over the former Team Sky sponsor.
The company had shown substantial growth in the previous year, increasing turnover from £48.8m to £72.2m for the year to January 2017, with profits before tax of £1.4m. A big incentive for prospective buyers would have been the explosion in RCC club membership, which has grown to over 9,000 members.
Simon Mottram - Rapha CEO and founder
Hefty discounts
Amid the restructuring of Rapha’s workforce, TheTelegraph also highlights that Rapha has been selling heavily discounted kit, believed to be the knock-on effect of efforts to increase revenue ahead of the company’s sale last year.
Rapha has listed many of its more premium items, such as its Pro Team range, on the discount clothing website Sportpursuit at less than 50% RRP.
'As we entered 2018, we adjusted our trading strategy, prioritising long-term profitable growth above short-term sales,' a spokesperson said.
While a controlling stake of Rapha was bought by RZC Investments, the senior leadership team at the company has remained largely unchanged, with Simon Mottram continuing as CEO.
Rapha was launched in 2004, founded by Mottram, with a focus on mixing style, cycling heritage and performance. It enjoyed early investment from London-based Equity Investors Active Partners. It took on the sponsorship of Team Sky in 2013, before ending the agreement in 2016.