Rapha sells through 20 websites and ships to more than 100 countries.
Steuart and Tom Waltons’ RZC Investments is now the majority shareholder of cycling lifestyle brand Rapha of London, England, the companies announced Monday.
Rapha declined to release a valuation figure.
The BBC reported that Aston Martin shareholder Investindustrial was interested in Rapha, and, according to Red Kite Prayer, the cycling brand had been courting buyers. Cycling blog Red Kite Prayer reported that LVMH, the group that owns Louis Vuitton, was interested in the company.
Other Rapha owners include Founder and CEO Simon Mottram and lead investor Active Partners of London.
The brand was launched in 2004. Mottram will remain as CEO and has “retained a significant part of his stake in the business,” according to a news release.
The Walton brothers are the sons of Jim Walton, chairman of Arvest Bank and the youngest son of late Wal-Mart founder Sam Walton. Their investment will allow Rapha to roll out its clubhouse network and membership club, add products and services, expand its reach globally, and “strengthen its leadership position in cycling,” the company said.
Steuart Walton, co-founder of RZC Investments, said in the release, “Rapha represents the very best in the world of cycling. Our investment demonstrates our enthusiasm for its quality products, amazing community of cyclists and customers and its strong future. Rapha’s strategic vision has set the company on a path of tremendous growth and opportunity. We’re excited to be part of this next chapter by bringing the best sport in the world to more people in more ways and places.”
Mottram said in the release, “This is an exciting day for Rapha. It heralds the start of the next stage of our journey and is testament to the growth and potential that people see in Rapha and in cycling.”
“The arrival of RZC Investments as a shareholder means we can pursue our mission to elevate cycling as a global sport and recruit more participants by engaging them and enabling them to ride with us at all levels,” he said. “Support from RZC Investments will allow us to further expand our active global community of cyclists, develop even better and more innovative products and services to enhance cyclists’ lives and inspire many more people to take up the world’s greatest sport.”
Mottram told Arkansas Business in a phone interview Thursday the Waltons’ investment would not lead to a dramatic change in Rapha’s growth strategy, but that it would give the company more buying power.
Before the Waltons’ purchase, Rapha did not have much outside investment and plowed much of the profit from its sales back into the business in order to grow, he said. Most of the company’s other investors have been with the brand since its launch; some are the CEO’s friends and family.
Mottram said the Waltons’ investment would offer the brand strength, stability and long-term support.
He doesn’t expect the Waltons to attend weekly business meetings but suspects that, because they are passionate about cycling and the brand, they will be actively involved in some other way.
William Blair, Pinsent Masons and Withers advised Rapha on the transaction.
The Waltons aren’t the only Arkansans involved with the brand. Brendan Quirk, who sold Little Rock’s Competitive Cyclist for $20 million in 2011, is president of its North American division.
Mottram said there are no immediate plans to open a Rapha clubhouse or manufacturing facility in Arkansas, but Quirk lives in Little Rock and the brand is pushing to expand into the U.S.
He also said, if Rapha eventually expands into Arkansas, it would probably come to Little Rock or Bentonville.
Mottram added that Rapha is moving its distribution center closer to the state, from Oregon to Kentucky.
Rapha is already selling through 20 websites, shipping to more than 100 countries and operating 17 clubhouses. The release states that the company has grown by more than 25 percent every year, has been profitable since 2009, has more than 200,000 customers, and has 450 employees.
Mottram said Rapha has opened seven clubhouses this year and plans to open two more. Also in his plans are a redesign of its website and rolling out several new products that are in development now.
Rapha uses a direct-to-consumer business model and also sponsored Team Sky, a British professional cycling team that competes in the UCI World Tour, for four years. Sky Team member Bradley Wiggins won the 2012 Tour de France, becoming the first British winner in its history, and another teammate, Briton Chris Froome, went on to win The Tour de France four times.
Mottram said the growing popularity of cycling in the U.S. and the country’s recent surge of investment in related infrastructure creates an opportunity for brands like his.
He also said the U.S. is slightly behind other markets because it doesn’t have the infrastructure yet which many European countries and other places have had. Cycling is also a more traditional activity or something people aspire to do in other markets whereas it’s still a bit “alien” in the U.S.
On a global scale, the industry and his business have benefitted from the macro trend of people becoming more interested in environmental issues and living healthier, more active lives, Mottram said.
He also said Arkansas, with the exception of its hot and humid summers, is a great place for cyclists. “The terrain in Arkansas is perfect. Some of the hills you’ve got are just right for cycling. It’s all very accessible,” Mottram said. “I think in many ways Arkansas is the perfect place to ride a bike.”
He added that the state said has the potential to, in the future, be a magnet for American and international riders.
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