Rapha has announced a new partnership with USA Cycling as its latest financial results reveal a net loss for the eighth consecutive year.
Last month, Rapha revealed it was ending its seven-year partnership with EF Pro Cycling, and Rapha’s CEO Fran Millar said the relationship had “gotten tired”.
The new partnership is part of a renewed vision for the lauded cycling brand and will see Rapha working with USA Cycling for the 2028 LA Olympic Games.
Speaking to a new demographic
“We wanted to build a broader portfolio that spoke to a new and different demographic of the sport in a way that we haven't done before. This will be sort of one of the pinnacle things that we do,” Millar said at a press event in October.
Millar, who joined Rapha last year, says the LA Games could have the same impact on cycling in the US that the London 2012 Games had in the UK, encouraging more people to ride bikes.
Rapha will dress USA Cycling’s athletes from 2026 through to the end of 2029, which will take the company into new cycling disciplines, including BMX, and notably track cycling.
Working with the USA track team will push Rapha in ways Millar feels its relationship with EF Pro Cycling did not.
Millar says the skinsuit for EF Pro Cycling was last tested in 2022. “That’s an anathema to me in terms of having a high-performance suit – that you wouldn't test every year and get it in the wind tunnel to understand what you could be doing to go faster.”
She says there isn't the luxury of waiting that long in track cycling “where every millisecond counts”, and that the performance gains developed for the USA track team will eventually filter into Rapha’s other products.
Financial results and kicking the "discounting drug”
Millar says there is a “real confidence” in Rapha for the first time in a long time. Its financial backers are supportive of the company pursuing opportunities that could be seen as risky but with high-reward potential, including partnering with USA Cycling.
This may come as a surprise to those who have followed Rapha’s financial results in recent years. Rapha’s latest financial results reveal an annual revenue of £96.2m in the year ending January 2025 and a net loss – its eighth in a row – of £15.6m.
However, Rapha’s chief financial officer, Michelle Woolaghan, says this is not a number the company is focused on internally. Instead, Rapha is concerned by its Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA).
In 2023, Rapha achieved a positive EBITDA of £900,000. For the latest results, ending in January 2025, the EBITDA has moved back to -£2.6m. Woolaghan says this is due to a conscious decision to reduce the level of discounting and promotional sales.
“Within the 2024 numbers, the full price sales held level and what dropped back was promotional or discounted sales. So our gross margin improved across all the channels. But nevertheless, because of that volume drop in the short term, that impacts profitability,” says Woolaghan.
“We're kind of coming off the discounting drug, I suppose,” she says.
£10 million payback
Woolaghan and Millar are also keen to explain why Rapha’s results look the way they do, and a large contributing factor is amortisation, or the depreciation of goodwill and tangible assets, after it was bought by the grandsons of the Walmart founder Sam Walton, Steuart and Tom Walton, in 2017.
Woolaghan says the amortisation is roughly £10 million a year: “So we just have that hit to the profits and losses every single year until we've paid off the kind of purchase price.” She expects this will continue for the next eight to 10 years.
Rapha has also decided to reduce the carrying value of the company – the measure of a company's value based on its balance sheet – by £102m.
“What that means in practice is when we assess the outlook of what it will take to get back to strong EBITDA and revenue growth,” says Woolaghan.
Millar says this will have no impact on customers.
