Walmart bought Rapha. On the face of it, the pairing of a high-end cycling brand with a mass market retailer does sound like something out of alternate universe. Rapha is, after all, famous for its beautifully designed and expensive cycling clothing. So what gives? You probably have two Waltons — not a new corporate interest —to thank.
On Monday, Rapha announced that RZC investments, private equity firm owned by Steuart and Tom Walton, had acquired a majority stake in the company. Those names sound familiar? Yes, those are the grandsons of Walmart founder Sam Walton. They reportedly paid $260 million for the brand.
The Walton brothers are avid cyclists, so they knew what they were buying. Launched in 2004, the brand was created by Simon Mottram and named for a 1950’s era French cycling team. A group of shareholders, including Active Partners, funded the brand at the outset. According to Rapha, the business has grown by more than 25 percent each year and has been profitable since 2009.
Rapha clothing now sells direct to customers through 20 localized websites and there are 17 Rapha Clubhouses around the world. The Rapha Clubhouse allows you to see and feel the clothing in real life, sip an espresso, and watch pro racing. Rapha Travel, meanwhile, offers a range of cycling trips to epic destinations.
So will you see Rapha gear in a big box store near you? Not likely. The acquisition by RZC is meant to support the brand’s continued expansion. Rapha plans more Clubhouse outlets, increased products and services through the brand’s membership club, and an extension of Rapha’s reach internationally.
One thing is for sure, the Waltons want to get more people on bikes. Through the Walton Family Foundation, the brothers have recently partnered with the People for Bikes organization and contributed $13 million toward developing mountain bike trails in Northern Arkansas. Bentonville, Arkansas, home to Walmart headquarters, currently boasts an extensive trail system and recently hosted an IMBA summit.
At the end of the day, RCZ’s acquisition is unlikely to change the Rapha brand you’ve come to know and love. With Mottram at the helm, we expect the brand to continue to turn out its distinctive designs made from carefully sourced fabrics. You’re simply likely to see more of Rapha in the world: More Rapha clubhouses in more cities, more clothing styles to tempt your wallet, more travel destinations to inspire your dream vacation. As such, the price of the quality gear is not likely to come down either.