Rapha freewheels through the pandemic as cycling demand booms
Pandemics and economic woes equal cycling booms, it seems. So it’s no surprise to learn that the last 10 months’ trading for Rapha have seen the upscale cycling retailer thrive when many retailers have suffered.
Founder and chief executive Simon Mottram told the Telegraph that many people have fallen back in love with cycling during the pandemic.
“When we look at the new customers… we’ve pulled in 155,000 customers last year... but by and large, those people around the world are existing cyclists”, he told the newspaper Monday.
Although 2020 trading figures are yet to be finalised, Mottram said that core earnings would be around £13 million after sales leapt 38% during 2020. Rapha has also decided to repay the money it received for putting a handful of staff on furlough following a bumper 2020.
But back-peddle to late 2019 and it was an entirely different story. After profiting from the post-2008 stock market crash and again after the London Olympics in 2012, the business hit a wall some 15 years after Mottram launched Rapha.
He admitted he and the team had “taken our eye off the ball” and they were severely affected by the “drug” of heavily discounting products and chasing top-line growth.
That was shortly after billionaire heirs to the US Walmart empire, Steuart and Tom Walton, acquired the business for £200 million. The new owners had to pour tens of millions of pounds into Rapha to avoid defaulting on bank loans.
Accounts covering 2019, due to be filed shortly, are expected to show the business had racked up a £5 million loss in 2018.
But flick up a few gears to 2020 and last year proved to be a revelation for the business’s turnaround.
“This is the third [cycling] boom, I think that I've seen in my time at Rapha. It’s interesting how they tend to go hand in hand with economic problems and the rest of the economy that cycling has these wonderful moments”, he added.
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