Rapha to close two ‘archive stores’ as firm reverts to direct to consumer model

Rapha has announced that its ‘archive stores’ in Kilver Court and Bicester Village will close this year. The firm explained that in seeking to focus on a direct-to-consumer business model, it will cease to hold sufficient stock to run an outlet business.

In a statement announcing the closures, the firm said: “Since our inception in 2004, we have always pursued a direct to consumer model to support our mission to make cycling the most popular sport in the world.

“Over the last year, we’ve taken steps to consolidate that model, focusing on full-price sales and reducing our reliance on promotional activity. This means we no longer hold sufficient archive stock to maintain a viable outlet business.”

In August 2017, Steuart and Tom Walton, two heirs to the Walmart fortune bought a majority stake in Rapha.

The firm’s founder Simon Mottram said that at that time the firm had been suffering from a growing focus on discounting.

“There’s a point at which the discounts at the end of the season become mid-season discounts and early-season discounts. And then Black Friday and it ends up being far too much of your business,” he said.

Speaking to road.cc last month, Mottram said that “probably 97 per cent” of Rapha’s sales were direct to consumer and that this inevitably resulted in a surplus of unsold stock.

“Where we got it wrong, like lots of brands, is we got onto that treadmill,” he explained.

“You're growing really fast so actually the bets in-season become even bigger because we grew at 25-30 per cent last year ,so you’re going to grow at 30 per cent next year, so you’re buying 30 per cent more stock, so you’re making a 30 per cent bigger bet.

“So, you're ending up with more unsold stock at the end of the season and you have to discount more, and the more you discount the more immune to discounting the market becomes so you have to discount deeper.”

The firm has therefore taken conscious steps to rein things in.

“Our promotional days this year are 50 per cent less than last year and our full-price sales are something like 35 per cent higher,” he said.

“We're actually really pleased with how it's going. The worst thing would have been if we'd not discounted through the summer and then when you do have a discount sale, and nobody wants to buy.

“That would mean you’ve got something really badly wrong because there’s no demand unless there is a discount all the time, and that doesn't seem to be the case.”