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<\/p>\nYet again the financials aren\u2019t looking so hot, but there are bright spots \u2014 just don’t expect more deep discounts. <\/p>\n
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Updated October 22, 2025 10:09AM<\/p>\n
Velo was given an early look at Rapha<\/a>\u2018s 2024 finances before they were publicly shared this week, and the picture isn\u2019t rosy.<\/p>\n Despite that, the apparel brand promises change is on the way, and there are some glimmers of hope in the numbers that seem to support the promise.<\/p>\n We took a closer look at the financial picture.<\/p>\n What the 2024 financials actually say<\/p>\n Rapha was looking to get ahead of the dialog by releasing its financials. It makes sense why; those numbers in parentheses are negatives.<\/p>\n For those unfamiliar with all the terms in that chart, here\u2019s a quick rundown.<\/p>\n Total turnover is what is sometimes referred to as gross revenue or simply how much product the company sold. In this case it\u2019s lower year over year.<\/p>\n EBITDA is a way to easily display the performance of a business. It stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. Think of it as the money-making power of the company\u2019s core operations, ignoring things like how much debt it has (interest), where it\u2019s located (taxes), or how old its assets\/equipment are (depreciation); in cycling terms it\u2019s sort of like how you might think of normalized power in your own numbers. Rapha moved from a small profit last year to a loss this year.<\/p>\n There are some bright spots here though. Both operating losses and net profit loss have shrunk from last year. There\u2019s also growth in new customers to the brand\u2019s website, with money spent by customers also growing.<\/p>\n Rapha says it\u2019s in a turnaround that\u2019s only just getting started. \u201cWe are only one-year into a multi-year turnaround, with new leadership and a new business and marketing strategy\u2026\u201d said CEO Fran Millar.<\/p>\n Of course you expect that the CEO will say that but there\u2019s another piece. Rapha is writing down the value of the company. When Rapha was acquired in 2017 there was an investment into the business. Last year the investment value was \u00a3169m but it has been impaired (downgraded) by \u00a3102m. In other words the business is worth \u00a3102m less.<\/p>\n The company states that a significant part of the \u201coperating loss and net profit include the amortization of goodwill and intangibles from the 2017 purchase of Rapha Racing\u201d and goes on to say \u201cthis amounts to annual charges of more than \u00a310m.\u201d In other words \u00a310m of what the company is reporting as a loss is merely numbers on a page and we should expect this to \u201ccontinue to be amortized in line with accounting policy in years to come.\u201d<\/p>\n Of course you can do the math yourself and realize that even removing \u00a310m from the numbers wouldn\u2019t make the company profitable. Rapha claims that another piece of the puzzle is that \u201ca contraction in total revenue was anticipated due to reduced discounting activity and increased mix of full price sales. This reduction was planned in line with our multi-year transformation plan.\u201d In other words, say goodbye to waiting for the annual Rapha sales.<\/p>\n Rapha Boss Promises Change<\/p>\n Explaining away financial numbers and write-downs with a promise of turnaround only works if things change. The top line quote from Rapha CEO Fran Millar is \u201cTransformation takes time, and we aren\u2019t expecting to see immediate results but the strategic decisions we are taking, including the ones we are announcing today, will enable us to become profitable again as a business and support our vision to use the transformative power of cycling to make a difference to the world.\u201d We also discussed what that actually meant.<\/p>\n During that discussion, Millar expressed understanding that Rapha has to be at the top of the game in style and technology if there\u2019s going to be a successful move away from discounting. Millar was also clear that she understood that the brand had fallen behind in the inherent promise of quality that Rapha once represented.<\/p>\n When asked why it\u2019s taken so long to correct a strategy that was obviously a problem, Milar was again quite frank. The history, according to Millar, is that after the 2017 sale of the brand the initial transition wasn\u2019t smooth. The shift from a founder-CEO to something new is often a time of upheaval for a company and that happened here. Then a pandemic hit. The organization has been working to clear stock and save costs but now it\u2019s time to move forward.<\/p>\n When pushed on the subject, Millar doubled down on the idea that \u201cquality is key at every level.\u201d She claimed that there will be a reinvestment of resources and a renewed focus on \u201csamples, prototypes, and quality control right at the factory.\u201d<\/p>\n![\"Rapha](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/10\/Credit-Emily-Maye-for-Rapha_Shot_12_4959_RGB.jpg\"\/)
<\/a>(Photo Emily Maye for Rapha)
\nRapha calls this the beginning<\/p>\n![\"Rapha](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/10\/Credit-Emily-Maye-for-Rapha_Shot_06_1940_RGB.jpg\"\/)
<\/a>(Photo Emily Maye for Rapha)
\nSponsorships are also changing<\/p>\n