Rapha turns to China after eight years of losses

by QIN Lixin

After eight consecutive years of losses, Rapha, the British premium cycling apparel brand often likened to the "lululemon of cycling," is pinning its turnaround hopes on China.

Parent Carpegna Ltd wrote down ￡102.3 million of Rapha's book value—more than 60%—after the brand again failed to return to profit. For the fiscal year ended Jan 26, 2025, Rapha's revenue fell to ￡96.23 million, from ￡110 million a year earlier. EBITDA posted a loss of ￡2.63 million, while net losses reached ￡15.63 million, extending a loss streak that began in 2017.

After the write-down, Rapha opened its first directly operated store in mainland China on Nov 28, choosing Shanghai as growth in Europe and other mature cycling markets cooled after the pandemic-era boom.

The challenges are not limited to financial results. Membership in Rapha Cycling Club (RCC) fell by about 3,000 to roughly 15,000 globally. CEO Fran Millar has said reduced investment weighed on membership, even as the club remains central to customer acquisition.

In comments to the Financial Times, Millar said the pandemic cycling surge "probably masked some things that should have been addressed earlier," adding that many losses were "self-inflicted." Her turnaround plan focuses on tighter pricing discipline, a streamlined product range and renewed community engagement, with a goal of narrowing losses next year and reaching EBITDA profitability by 2027.

A key shift has been a return to full-price selling after heavy discounting to clear excess inventory. The strategy faces its first major test in China.

At Rapha's Shanghai store, most items are priced around 1,000 yuan, while the top-end Pro Team range can reach 3,000–4,000 yuan per item. According to a 2024 China Bicycle Industry Survey, most Chinese consumers budget 101–200 yuan for cycling shorts and 201–300 yuan for jerseys, underscoring the pricing challenge.

Competition is intensifying. International brands such as MAAP and Pas Normal Studios have expanded in Shanghai, while domestic labels including Lameda, MBO and GRC are gaining share at lower prices. Mass-market players Decathlon and Li-Ning dominate volume.

Industry research from Fortune Business Insights shows price sensitivity remains high, limiting room for new entrants. Millar has said Rapha must differentiate through technology, materials and design to defend its premium positioning.

Rapha has discontinued its lifestyle line, consolidated long-distance collections and cut annual new-product launches from about 65 this year to roughly 30 by 2026, with redesigned products due next summer.

Rebuilding the RCC is another priority in China. Membership costs 688 yuan a year and includes daily 500-yuan bike rentals and free coffee, alongside member-only and open rides used as acquisition channels.

On the professional side, Rapha ended its seven-year sponsorship of the EF Pro Cycling Team and signed a four-year deal with USA Cycling, backing Olympic teams through the 2028 Los Angeles Games.

Early indicators in China show limited but growing traction. Since entering the market in March 2024 through partnerships with Trek and Club100, Rapha has attracted more than 400 club members in Shanghai and Beijing, and more than 1,000 riders joined this year’s Rapha Women’s 100 event in mainland China.

Fortune Business Insights forecasts the global cycling apparel market will grow from US$2.28 billion in 2025 to US$3.36 billion by 2032, with Asia-Pacific posting the fastest growth. China's market, however, remains crowded and price-sensitive, leaving Rapha's premium, full-price strategy facing a stringent test.