Rapha targets 100 stores in 10 years under new ownership
On 23rd October, UK high-end road cycling apparel brand Rapha opened its first German store, in the heart of Berlin, inaugurating a 'club house' at 5 Alte Schönhauser Strasse. As usual for Rapha, the store will showcase the brand’s four performance lines and its 'City' urban line, but will also act as a focal point for the members of its community of followers. The label is in fact active in organising events, cycling outing, training sessions and tours inspired by the world of road cycling.
The Berlin opening took place only two days after Rapha inaugurated its second UK Archive Store outlet, inside the high-end shopping mall at Bicester, and is a clear indication of the ambitious plans the new owners have for Rapha. "Last summer the company was bought by Steuart and Tom Walton, the grandsons of Wal-Mart founder Sam Walton," said Franziska Stenke, in charge of Rapha in France, and who is currently busy with a pop-up Rapha store in the Marais district in Paris. "They are both mountain-bike enthusiasts and have financed several MTB circuits in the USA."
Rapha was once reportedly in the sights of a luxury and accessible luxury specialist like the L Catterton investment fund, but was eventually bought for approximately GBP 200 million on 7th August by the Waltons' RZC Investments private equity firm. According to analysts, the sum paid by the US firm was just over 20 times Rapha's profits.
Rapha's founder Simon Mottram is still in charge of the business and holds a minority stake in the brand. Last year, Rapha reportedly generated a revenue of GBP64 million (€72 million), up about 30% compared to the previous fiscal year.
With the new owner's arrival, Rapha wants to speed up its expansion, deploying a business model based on selling directly to customers. "Last year, we made substantial inroads into the USA, with five new openings," said Franziska Stenke. "We have now opened our twentieth store. Our declared objective is to reach 100 stores worldwide in 10 years. In France, we are looking at a possible opening in central Paris by early 2018. Rapha already has a presence in Amsterdam, Majorca, Copenhagen, London and Manchester, and we've set our sights on Munich, Milan and Barcelona."
Between 2015 and 2017, the brand's staff has doubled, and it now has about 400 employees. Seeing the growth of the cycling and accessible luxury markets, and given how well Rapha works with its cycling community (it is said Rapha could open a theme hotel), the brand has the potential to continue posting solid growth rates for the next few years.
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