In another potential blow to Rapha, the upscale British cycling clothier, owners Tom and Steuart Walton of Walmart fame are reevaluating their investments in outdoor oriented sports companies after years of losses, according to Fortune.
RZC Investments, the private equity firm of the Walton brothers that acquired Rapha, helped bail out Wahoo Fitness and invested in the boutique Allied Cycle Works, announced an immediate pause to new investments last week and is reevaluating the future of the fund.
Since RZC acquired Rapha eight years ago the company has not turned a profit, despite the popularity of their £200 jerseys, bib shorts and other colorful accessories with amateur cyclists. In 2024 Rapha lost £17m and saw it’s value almost cut in half to about £67m. That is a precipitous drop when one considers RZC paid £200 to acquire Rapha in 2017.
Maintaining continuity of leadership and business direction at the company has been a challenge since the acquisition. The CEO office has seen a revolving door of occupants. Founder Simon Mottram stayed on board for bit, then the company went through a stream of leaders including William Kim, Daniel Blumire, Francois Convercey and now Fran Millar.
Last May RZC and the Walton brothers invested another £15m in Rapha to give the company more runway to get off the ground and complete a turnaround.
At the time CEO Millar was quite positive and said, “We’re in quite a unique position in terms of the fact that our owners are willing to go again and fund again. There’s a real confidence in Rapha for the first time in a long time.”
Though, with the latest pull back by RZC, Millar and Rapha may no longer have the confidence of the Waltons, nor much time to right the ship.
Photo Credit: Rapha
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