I want to start this opinion piece off by first making it very clear, I am not a business guy. I am currently sitting in my van, looking at the surf, hoping the tide rises soon so I can get out there before taking off on another mountain bike adventure. Abbreviated titles such as CEO, COO, CFO, and others all seem pretty jumbled to me, and oftentimes almost made up. Also if you have followed me for any amount of time you most likely know I'm a small business guy, and think corporate america is stealing the soul out of the bike industry and SRAM transmission is nowhere near as good as AXS…okay maybe I just threw that one in there.
However, even with the little business knowledge I have, it seems very weird to me to see the headline “Rapha North America Abruptly Closes Bentonville Office, Lays Off Staff” by VELO. When my buddy first asked me if I had heard the news about Rapha shutting its doors I thought he was joking. Rapha was supposedly untouchable and under the Walmart / Bentonville umbrella. I had started to see the brand in REI and even recently visited its store in both Singapore as well as Japan. How can a powerhouse like this shut its doors in the mountain bike capital of the world?
Then I read the Velo news article. Rapha seems to have abruptly closed the North American office in Bentonville with VELO news sharing this quote from the CEO
“We are realigning Rapha to better reflect our strategic priorities and current market dynamics. Over the past five years, Rapha has experienced significant growth and these recent changes will focus us on accelerating towards our purpose of inspiring the world to live life by bike.”
Now a bike company laying off staff is not new in 2024, in fact it is probably expected at this point. Sales are low, margins are razor thin with all the discount sales going on, and companies seem to have gotten in over their head. However what struck me very odd about this was the need to shut down the North America Offices. Rapha is still continuing to operate as a brand but they deemed it essential to lay off 6 employees and shut the operation down in Bentonville, the same town that is marketing itself to the bike industry as the future of mountain bike commerce.
Why is that odd to me? Well it doesn't seem like long ago that I read an article on Velo pointing out that Rapha sold for $260 million dollars, and a majority of those shares were bought by RZC investments which essentially is the Walmart brothers. At the time when I found this out, I thought that number seemed insanely inflated. But also once again, I by no means am an expert at business.
However what is so confusing to me, is that if the Walmart brothers are still involved in Rapha, why would they shut down the North America offices located in Bentonville, the town they are spending so much money to make the MTB capital of the world? How does that make any sense? And we are not talking about a crazy team of 100 staff members, the VELO news article says the layoffs were 6 out of 8 employees. Were there only 8 employees at Rapha North America? Does the optics damage of shutting down in Bentonville not outweigh the cost to continue the operations for a team of 8 employees if the goal is long term growth of the city of Bentonville within the bike industry? Or does business not work that way?
Honestly guys, I don’t have an answer for you. I feel like if I type any more I will get a cease and desist from someone with a 3 letter job description abbreviation so I am just going to go surf.
-Mo Awesome