Take3 weeks ago
Rapha's only profitable year on record was 2017 — the same year the Walton family acquired it for roughly $254 million. Every year since has been a loss, nine straight. The product didn't fail; the growth strategy made scarcity impossible, and scarcity was the entire business model.
Wholesale deals with Wiggle, a push into mountain biking, and now-routine 50 per cent discounts replaced the tight distribution and full-price discipline that built the brand's cult following through the mid-2010s. Customers noticed: long-term buyers began waiting for sales instead of paying full price, which is fatal for a brand whose value proposition was never buying at full price. As one Roadman Cycling analysis put it, «the things that get you to 10 million revenue might destroy you at 100 million revenue» — Rapha scaled by doing the one thing a cult brand can't survive doing.
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