LONDON (BRAIN) — Carpegna LTD, the parent company of Rapha Racing, has filed an audited financial statement with Companies House, the United Kingdom's registrar of companies, showing an operating loss of nearly 20 million pounds ($25 million) last year.
The statement covers the six-month period starting in August 2017, when Carpegna, a group backed by Walmart heirs Steuart and Tom Walton, acquired the majority of Rapha's shares for about 200 million British pounds. The period ended Jan. 28, 2018.
While nearly a year old, the statement nevertheless provides some insight into the company's situation.
For the period, the company recorded sales of 42.2 million pounds. Cost of sales was 24.5 million pounds for a gross profit of 17.7 million pounds.
However, the company registered a loss of nearly 19.6 million pounds due to exceptional administrative expenses, including 1.8 million pounds related to acquisition costs, 13.5 million pounds related to acquisition accounting of the value of inventory, and 5.5 million pounds in amortization.
In June 2018 the company changed its name from Capegna Bidco Ltd. to Carpegna Ltd.
During the six-month period, the company's sales were fairly evenly divided between four markets: the U.K. (23.3 percent), Europe (20.9 percent), North America (25.2 percent) and Asia-Pacific (25.4 percent). The rest of the world accounted for 5.1 percent of sales.
The company had an average of 457 employees for the period, including 193 in administrative and central functions, 211 in Rapha Clubhouses, and 53 in regional marketing positions. Wages and salaries for the period totaled 6.7 million pounds.
In September, Rapha announced it had cut 15 jobs at its London headquarters. BRAIN learned of additional job cuts at U.S. Rapha Clubhouses at about the same time.
At the time, a Rapha spokesman in London told BRAIN, "In 2017 Rapha delivered our 14th consecutive year of strong sales growth, with revenue increasing by 32 percent. As we entered 2018, we adjusted our trading strategy, prioritizing long-term profitable growth above short-term sales."
The spokesman said the new strategy led to the job cuts in the fall.
Also in September, Financial Times reported that Rapha had greatly reduced its travel division, cutting back its planned trips in 2019 from about 80 to six.
