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British cycling clothing brand Rapha has “continued to strengthen its core business operations”, a spokesperson for the company said, despite recording financial losses for the seventh year in a row, with its losses deepening by over £10million.
In the latest accounts, held under Carpegna Ltd and covering the year to 28 January 2024, the company posted a pre-tax loss of £22.7million ($29.5million).
The figures represent a growing loss, with this figure standing at £12million ($14.6million) from the 2023 accounts. However, it is not the biggest loss, with previous years standing at £10.5million (2022), £7million (2021), £23.5million (2020), £32million (2019) and £19.8million (2018).
“Against the backdrop of a turbulent and competitive post-pandemic cycling sector, as well as decreased consumer confidence in several key markets, Rapha has continued to strengthen its core business operations, returning to a positive EBITDA [earnings before interest, taxes, depreciation, and amortization] position,” a spokesperson said on Tuesday afternoon.
“The management team remains focused on further improving business profitability and resilience while the sector remains challenged,” they continued. “Meanwhile, our marketing, creative and product teams continue to strive to make the Rapha brand more visible and engaging to cyclists, as well as delivering a steady stream of product innovation to increase customer lifetime value.”
Carpegna Ltd was incorporated in August 2017 and acts as the holding company for Rapha and its subsidiaries.
Rapha was founded in 2004 by Simon Mottram and Luke Scheybeler; it was sold to RZC Investments in 2017. In August, it was announced that the former Team Sky CEO Fran Millar would join the brand as CEO.
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The last time Rapha posted a pre-tax profit was in January 2017, when the accounts revealed gains of £1.4million ($1.7million).
Turnover also fell, from £118.4million ($142million) to £110.2million ($132.2million). Sales were down the most in the UK, where turnover dropped from £22.3million to £17.7million, a decrease of 18 per cent. Turnover dropped by just two per cent in North America.
The company also spent £2.9million ($3.5million) moving warehouse in 2023, which would not have helped the balance sheet. Gross profit only fell slightly, from £42.8million ($55.5million) to £42million ($54.5million).
In the accounts, one of the directors, Sean Clarke, said that the figures come “against the backdrop of an ongoing turbulent and competitive post-pandemic cycling sector, as well as decreased confidence in several key markets”.
The past two years have been difficult for the cycling industry, the highest profile casualty being Wiggle Chain Reaction Cycles which entered administration in 2023 and was eventually bought by Frasers Group. Earlier this month, UK distributor i-Ride entered administration.
Experts have advised that businesses within the cycling industry need to strive to ‘survive to 2025’, when it is hoped that issues created by overstocking during the Covid pandemic will begin to settle.
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