Ride and seek: Fran Millar on her plans for Rapha’s turnaround

In this episode of The Luxury Society Podcast, hosts Robin Swithinbank and David Sadigh speak with Fran Millar, CEO of high-end cycling brand Rapha. From helping to build Team Sky into a Tour de France-winning powerhouse to leading the turnaround of Belstaff, Millar now faces her steepest climb yet – restoring Rapha’s reputation as the world’s most desirable cycling brand.

With trademark clarity and energy, Millar shares what it takes to lead through transformation, the importance of culture, and how lessons from elite sport apply to luxury business.

Tune in for:
- How Fran’s 20-year career in high-performance sport shaped her leadership philosophy
- The challenges and opportunities in turning around Rapha after years of losses
- Why returning to brand clarity, community, and customer experience is key to revival
- How the brand is rethinking its global strategy, from London clubhouses to booming cycling culture in China
- Why AI, data and precision will drive the next phase of Rapha’s growth

Brought to you by Digital Luxury Group. Produced by Juliet Fallowfield, 2025  fallowfieldmason.com

Transcript

[00:00:00] 

[00:00:01] Hello, and a cozy November. Welcome to the Luxury Society Podcast, brought to you by Digital Luxury Group. I'm your host, Robin Swithinbank. 

[00:00:09] David Sadigh: And I am your cohost, David Sadigh.. 

[00:00:11] Now this is our regular listeners Will know is the podcast that dissects the luxury industry using insider conversations and data-driven insights to try and find out how the gilded world of luxury works and to identify who's winning and who's not doing so well as the tectonic plates of the global economy continue to shift reshaping the luxury landscape In that vein, this week's guest is Fran Miller, chief Executive of the High-End Fashion Cycling Brand, Rapha.

[00:00:38] 

[00:00:38] Speaker: Fran has an incredible CV having been pivotal in the founding and the development of the Uber successful team Sky cycling team, and more recently in the turnaround at British Heritage Luxury Fashion brand Bell Staff our conversation with her coming up.

[00:00:53] David Sadigh: And then we're heading over to China to catch up with our man in Shanghai, max Perot, whose latest Compass Index gives [00:01:00] further reason to believe China might just have turned a corner. So David on with the show.Let's do it. 

[00:01:07] Fran Millar: The imagery from the 1960s and 1970s cycling is quite rock and roll. It's quite punk. it's got some glamour to it. and Rapha lent incredibly hard into that.

[00:01:17] Fran Millar: When you're in this level of turnaround with this level of turmoil and this amount of change, the big bits are so important that you're not at the marginal gains stage yet. you have to be willing to be disliked because, I think you can't be loved unless somewhere in the world someone hates you. It's one of the only sports in the world that makes you more sustainable while you're doing it. So it's like you get fitter, you're more sustainable, and it, it's adding positivity to your life.

[00:01:38] Fran Millar: the biggest influence on my personal and professional life.

[00:01:40] Fran Millar:  by a Country Mile has been Dr. Steve Peters. his approach has always been that it excellence isn't subject specific.

[00:01:48] Fran Millar: I think we can be the prince and king of cycling

[00:01:52] Robin Swithinbank: On this week's episode of the Luxury Society Podcast, David and I are settling up and peddling into the world of Highend cycling for the first time. [00:02:00] Today's guest is Fran Miller, chief Executive of the High-End Cycling Fashion Brand, Rapha. Fran began her career in cycling by setting up her own talent management agency that counted her brother, the professional cyclist David among its clients.

[00:02:13] Robin Swithinbank: In 2009, she ins David Brailsford would set up Team Sky, the road cycling team that would become the dominant force in road cycling in the 2010s, winning no fewer than seven Tour de France. Fran would spend 11 years with the team rising to the position of chief executive. The team was taken over by the billionaire, said Jim Radcliffe iNOS in 2019, and she would stay on for one more year before Radcliffe.

[00:02:35] Robin Swithinbank: Asked her to revive the fortunes of one of his portfolio of companies, the loss making British luxury brand Bell staff after four successful years with the company during which she has said she returned the brand to break even point. In September, 2024, she was appointed Raffa's fourth Chief Executive in three years on paper and even a steeper task than she'd faced at Belstaff.

[00:02:57] Robin Swithinbank: Founded in 2004 and fueled [00:03:00] by the genesis of the so-called mammal or middle-aged man in Lycra, Raffa's reputation and revenues had gone skyward during the cycling boom of the two thousands and 2000 tens. Prompting a 200 million pound acquisition in 2017 by AZ Sea Investments, putting it under the ownership of billionaires Stuart and Tom Walton, part of the US Walton Family Dynasty.

[00:03:21] Robin Swithinbank: But it's since lost its way. Posting seven years of losses prior to Fran's arrival with no light at the end of the tunnel. The seasoned executive with the winning track record was appointed to return the company to the front of the Peloton and set it back on the path to growth. So 14 months into our new role, Fran joins us now from her base in London.

[00:03:40] Robin Swithinbank: Fran, a very more welcome to the podcast. Thanks so much for joining us on The Luxury Society Podcast. How are you?

[00:03:46] Fran Millar: Very well, thank you, Robin. Nice to meet you both. Hi David.

[00:03:48] David Sadigh: Hi, Fran. Welcome.

[00:03:50] Robin Swithinbank: So, Frank, quite a journey you've been on and, quite the journey RAF has been on these past few years. first question, why take on a job that on day one must have felt like standing at the foot of the Tour De France [00:04:00] is famously intimidating Al do.

[00:04:02] Fran Millar: A host of reasons, really. I think I've known the brand for a really long time. I think as per, my bio, I've been in and around the sport since way before. It was cool and way before it was interesting. Um,and I think, I'd watched kind of the creation of Rapha I'd,seen what they'd done in the, prior to them coming on board as the apparel partner for Team Sky.

[00:04:20] Fran Millar: Obviously worked with them during the time that they were with us at Team Sky for about four years and then had seen them subsequently go on. Through their acquisition and everything else. And I think whilst I was very much an outsider by that point in time, after my four years at belstaff looking in, I was al, I have always felt actually, even in its heyday that Rapha had more potential than I think any other brand with that level of sort of subject matter specialism.

[00:04:42] Fran Millar: And I was just really intrigued and excited by the proposition of something that. I felt I could bring, I, I actually have said in other podcasts, in other interviews that it felt like the perfect marrying of my experience, like 20 years in professional high performance sport, four years cutting my teeth in a, turnaround brand, a British heritage brand.[00:05:00] 

[00:05:00] Fran Millar: It just felt like, wow, that opportunity's not gonna come around again. and I have had a career spent grasping opportunities as they've come my way, and it felt like one that would be silly not to go after.

[00:05:09] Robin Swithinbank: Opportunities or challenges? I mean, this is a big challenge, isn't it?

[00:05:12] Fran Millar: Yeah, it is. But I think that's where all the great opportunities lie. I think if you don't see opportunity and challenge, then You're certainly probably not proud to be a CEO. So I, yeah, I've always loved the idea of doing the things that people tell me I can't do. And telling me that things are either impossible or, insurmountable.

[00:05:30] Fran Millar: I think those are the things I relish getting involved in personally and professionally. but I don't think Rapha is that. I think yes, it's a big challenge. Yes, there's a lot to be done, but it's an incredible brand. It's, exponentially bigger from an awareness perspective and equity perspective than the sales have ever been.

[00:05:44] Fran Millar: it's held in such incredibly high esteem by all different pockets of society. And interestingly, for your listeners, I'm sure it's always been held, certainly for the first 10 years of its life as a real kind of, Example of what a great brand can be and what it can show up [00:06:00] like and how it can engage customers.

[00:06:01] Fran Millar: And certainly for my time at Team Sky and then into Bell Staff, every London agency that I got in front of would have a Rapha reference in their deck. and I think that speaks to the work that was done and the opportunity of the brand to, to build on that and go somewhere really special.

[00:06:16] David Sadigh: so when you walked in the door, what was the first things you realized needed to change?

[00:06:20] Fran Millar: I mean, the first thing quite literally walking in the door, you know, we are in a very, very cool office in Archway,beautiful warehouse that's been kind of converted to be the sort of. Mecca of the brand. Um, and the first thing I thought was, this doesn't feel or look like a business that's struggling.

[00:06:36] Fran Millar: so I think culturally a big shift in kind of what are we now, like what is this brand and what does it stand for? and how do we have to show up both internally as a business, but also externally to our customers because we have to make sure that we really are.

[00:06:49] Fran Millar: Putting our customer first, getting back to what we really stand for and really building from, like I said, that incredible base. so the first thing I thought walking in was there's a big cultural piece of work to be done [00:07:00] here. the second thing I probably thought was this place needs to get its confidence back.

[00:07:06] Fran Millar: the market has been incredibly, busy for the last five or six years. And I think when Rapha. Started in 2004, there were literally two or three other apparel brands, all of them, very historical, all of them, had been around for quite a long time and were very established.

[00:07:21] Fran Millar: And what Raffa did and the way it did, it was completely unique. They effectively created the category and created the market. That is not true anymore. Right? we are in a very crowded market with a lot of competitor brands, and we have to reestablish our position within that. So I think they were the first two takeaways I had.

[00:07:37] Robin Swithinbank: Yeah, that gives us some context, and that's quite internal and also it is a reflection on the apparel business itself. But of course, as has been the case for most businesses, not just in the cycling world,the marketplace, the landscape has been very complicated and complicated by the world fluctuations that precipitated by COVID and by its aftermath.

[00:07:54] Robin Swithinbank: And, but I do wonder whether the cycling industry was particularly heavily affected. By the social and [00:08:00] economic effects of the pandemic. Is that a fair reflection of something you wondered as you came in through the door that first day?

[00:08:04] Fran Millar: do you know what? I hadn't reflected on it in that way. I think the sport was absolutely impacted for the positive actually by the pandemic. I think a whole host of people got a bike out the shed and dusted it off and got on it. to use their hour of exercise and to get out the door and to, to move beyond just a walk around the house.

[00:08:21] Fran Millar: So. There was this huge boom in the sport that I think a lot of people in the industry have subsequently been like, oh, the boom of COVID. And like we're all dealing with the boom of COVID after in a negative way. and now we're seeing the other side of it, and that's really negative.

[00:08:34] Fran Millar: Whereas, and this isn't me being an optimist, For me, I was like, that's a whole host of people who weren't riding their bikes, who came into the sport, who bought apparel, who bought bikes, who bought things. Now they may have subsequently put them back in the shed, but that doesn't mean we can't get 'em back out again.

[00:08:46] Fran Millar: So I've always been like it suggests that the market still has latent potential. And interestingly, when we worked with Team Sky, that was one of the things that Jeremy Derek, who is the CEO of Sky recognized was in that period between the 2008 Olympic Games in 2012. the [00:09:00] sport that represented the most opportunity from a participation perspective was cycling, because actually lots of people rode bikes as kids.

[00:09:06] Fran Millar: Lots of people have bikes in the shed. Lots of people wanted to do more cycling, but the barriers to entry are, they're there and they're things like weather and safety and things, but they're surmountable. So for me, yes, I think COVID was. A horror show for a lot of industry. I think the challenges that the cycling apparel industry faced are exactly the same as all brands faced, which is overstocking, high inventory, big boom in sales, and then dealing with the aftermath of that.

[00:09:28] Fran Millar: I think we are in a unique position because what it did for us was brought a whole new influx of customers that we still have the details of, that we still have the information about, that we can still go out and speak to, and I think that's a huge opportunity.

[00:09:41] Robin Swithinbank: It's a terrible thing to do, but I use myself as a case study of one. I bought a bike during the pandemic. I bought myself a Rapha cycling vest, in fact, and, uh, was a very proud cyclist for a good 18 months. And all sorts of things happened. We got busy again.

[00:09:53] Robin Swithinbank: And, I don't cycle nearly as much as I used to and I haven't bought any apparel in yet, three or four years. So I assume that I'm not completely unique. There might be [00:10:00] one or two others. 

[00:10:00] David Sadigh: that means that, uh, Robin, you might receive like some CRM activation email to reactivate, you as like a COVID past customers from

[00:10:08] David Sadigh: France team quite soon. 

[00:10:09] Robin Swithinbank: I give it,

[00:10:10] Robin Swithinbank: Fran, you mentioned in another interview that Rapha tried all of these different things and diluted itself, in recent years. what specifically had the brand lost and was it trying to be, too many things to too many people?

[00:10:24] Fran Millar: I think without a shadow of a doubt, you know, I think it's, it's a really interesting one when you look back at a lot of the work that I've been doing internally with the team and for myself is looking back at the genesis of the brand and what was the DNA. And I think, you know, we were an incredibly Eurocentric brand.

[00:10:38] Fran Millar: We were very focused on that sort of romantic. View of the kind of French and Italian history of the sport. and it's a luxury place, right? The kind of, the great brand, the great luxury brands are from France and Italy. Cycling kind of in some way has a romantic link to those territories in that space.

[00:10:54] Fran Millar: I think the. The imagery from the 1960s and 1970s cycling is quite rock and roll. It's quite [00:11:00] punk.  it's got some glamour to it. and Rapha lent incredibly hard into that. and, appropriated a lot of it, it's, the San Raphael logo And the aesthetic and the font choices and, and all of those things we, we borrowed very heavily from that era.

[00:11:13] Fran Millar: And we also borrowed very heavily from luxury. And I think we as a brand built a fan base and a customer, and it is a fan base. What's interesting is that we have fans of this brand, you know, they're not just customers. they feel very deeply about the brand and they have a connection to it in many ways because we brought them into the sport and we showed them

[00:11:31] Fran Millar: a lens and a world that they haven't seen before in this sport. And I think when you are that clear about who you are and what you stand for and what you represent, you've got to be very careful about what the next steps are to broaden out the aperture and bring more people in. and I think probably over the course of the last seven years, we haven't given things enough time.

[00:11:52] Fran Millar: first and foremost, I don't think we were clear enough about what we were gonna try and expand into. I think it was like we, we knew we wanted to grow. We knew we wanted to [00:12:00] scale. We'd obviously been bought and I think there was a pressure to kind of demonstrate that the price had been worth it.

[00:12:05] Fran Millar: Therefore, how do you take this very boutique brand and make it scalable, and I think potentially, probably should have done. One or two things and tried it and stuck with it for a little while. But what happened with change of leadership, change of strategy when things didn't work, it was like, okay, we'll stop and we'll go and try something else.

[00:12:25] Fran Millar: so, firstly we'll try being a bit more mass market. We'll bring in an entry price point product that works okay, but it's slightly done. So now we need to go and do something that's, let's do mountain biking. Let's go and do this. Let's go and do that. and you just end up, and then, as I said, the lifestyle proposition that was brought in.

[00:12:40] Fran Millar: You know, that's a bold play to try and kind of be the sort of Lulu Lemon of cycling. It's like, what are you, so I think within all of that, there probably too many initiatives. Not enough clarity, not enough consistency. And the brand didn't stick to the things that had made people fall in love with it in the first place.

[00:12:57] Fran Millar: And I think any one of those things in [00:13:00] isolation, you probably could have done Okay. And not had the ramifications that we've had. For the doing them all together and several times over I think has led to a lot of brand erosion.

[00:13:09] Robin Swithinbank: Well, let's look at the turnaround strategy then, and ask what's at its core. Unpack a little for us and, and tell us how it's going.

[00:13:16] Fran Millar: Um, well, I think first and foremost at its core is getting back to what we are. Like who are we and who are we for? And understanding our customer now as well. I you know, you referenced the MAMIL, and I think, you know, they've been much disparaged.

[00:13:28] Fran Millar: Um, I love a mammal. And I think understanding who our customer is, who we're for, and who our new customer is. And you know, we have gone on that journey and over the course of the last seven years, we've brought lots of people into the brand who have a very different perception of it to what it was before.

[00:13:40] Fran Millar: So the first piece of work has been around that, which is about really consolidating behind our community, really, recognizing that we're a cycling brand for cyclists. Um, and that we have a role to play in the sort of world in terms of, you know, I fundamentally believe that cycling. Can provide an answer to a lot of society's ills, whether that's in [00:14:00] mental health crisis or, you know, mobility or, city congestion or any of those things.

[00:14:04] Fran Millar: And, and it's one of the only sports in the world that makes you more sustainable while you're doing it. So it's like you get fitter, you're more sustainable, and it's adding positivity to your life. So we have a role to play, but we are a cycling brand first and foremost. And I think. Making sure that we can recommunicate our connection to the sport, recommunicate our role within the sport, and reestablish ourselves as the authority and the established brand is key.

[00:14:26] Fran Millar: Then I think the other key thing is doing a few things brilliantly well. Um, we have to focus back on customer service. It's what we built our brand on, that customer experience, the element of surprise and delight, the all the little details that built up to the experience that you had with Rapha that made it completely unique.

[00:14:43] Fran Millar: We have to get back to those things. so, so really it's, it's about our customer. It's about our community, and it's about some consistency. and I think if we can deliver on that over and over again, we can get back to where we want to be.

[00:14:54] David Sadigh: Our listeners will we call Jean Claude Beaver's mantra, be first, be [00:15:00] unique, be different. your philosophy echoes that. Hated, adored, never ignored. So does returning Rapha to greatness mean. Also accepting that some cyclist will actively dislike the brand again.

[00:15:14] Fran Millar: A hundred percent. And that's absolutely fine. you do have to have a point of view, and you have to have a position, and you have to be willing to be disliked because, I think you can't be loved unless somewhere in the world someone hates you. So it's the kind of the rough to the smooth.

[00:15:27] Fran Millar: so yeah, I think as long as this brand has a strong point of view and a strong opinion, and for the people who love it, they love us again and they, If they feel something for us again and are passionate about us again and are advocates for our brand again, then I'm absolutely comfortable with the fact that we won't be for everyone.

[00:15:41] Robin Swithinbank: And who are we for then, I suppose is the question of who are you for? Uh, the new Raffa customer today, I suppose might be different to the Rapha customer. 10 years ago you talked about loving mammals still. Is there a particular customer that you're targeting?

[00:15:52] Fran Millar: I think the reality is we're 85% male brand. I think we want to grow our female base. I think we're seeing that is one of the areas in this. Sport, [00:16:00] you're seeing a real growth opportunity. but it, it's the aficionado cyclist.

[00:16:03] Fran Millar: It's the person who knows the sport, understands the sport. they probably have more than one bike. Uh, they're riding quite regularly. they understand what, being a cyclist is and what it represents for them. and they identify as it, it's something that means something to them.

[00:16:18] Fran Millar: Um, I think what's interesting is that. As we've broadened the lens on the brand, we recognize that it's not the only thing to them. And I think, you know, we are very comfortable that our customers are probably runners as well. They might even do triathlon. so it's not like we are only for the cyclists.

[00:16:33] Fran Millar: It's like we're for people for whom cycling plays a role in their life. And I think the reality of that customer for us is it's, you know, they tend to be higher net worth. They tend to have more disposable income. Time is the luxury that they put the highest, value on.

[00:16:45] Fran Millar: And I think that's the thing for us that we need to get back to recognizing that the people who choose to get on their bikes and spend time riding, we want that experience for them to be the best it can possibly be. And we want Rapid to be part of that journey with them.

[00:16:57] David Sadigh: It. It's interesting you mentioned that because [00:17:00] this idea of having also a very clear point of view, not being just vanilla, is something we have seen as being like,recurring, element of, success factor for many brands trying to,get successfully, relaunch. Now, the reality from what we understood is that Raffa expanded from road cycling to gravel mountain biking, trail running.

[00:17:20] David Sadigh: So critics might say you need to be the prince of one thing before becoming the king of everything. why broaden the portfolio when you haven't, yet won back the road cycling crown?

[00:17:31] Fran Millar: very valid. One of the key things that I have done is actually bring down the product category, range to, to bring down the SKU count to, to really focus back in on this year. Any of our customers who've been paying attention to our comms. We've really focused on our pro team collection.

[00:17:45] Fran Millar: The evolution of the product development cycle that we've been on. So from spring summer 26 and in autumn winter 26, the really key areas that we've really pushed on are pro team training. Now, gravel's an interesting one because gravel is effectively pro team in the same way. For [00:18:00] us, it's like a lot of the guys that have ridden on the road now ride on gravel and you say, what's the difference between our customer of 15, 20 years ago and our customer of now?

[00:18:08] Fran Millar: On the whole, he or she will probably also be riding gravel as well as road. they won't just be a pure roadie. So I think making sure that we cater to that is absolutely important for our customer. I would say mountain biking, it's, we have a small range. It's a fantastic range. I don't think we need to stop doing it, but we do need to make sure that we win back that road and gravel customer first and foremost, and then we can return our attention to mountain bike as well.

[00:18:32] Fran Millar: But continuing to service the mountain bike customers that we have is really important. And I also think multidisciplinary cycling as part of the shift that we've seen in the sport. More and more people. You know, when I was young, you were a roadie or you did mountain bike. 

[00:18:47] David Sadigh: 

[00:18:47] Fran Millar: Whereas now most cyclists will have a mountain bike, they'll have a gravel bike, they'll have a road bike. They're relatively comfortable jumping on a, multi terrain environment. And therefore, to be totally, sacrosanct. But we will only speak to the road [00:19:00] cyclists.

[00:19:00] Fran Millar: I don't think we'd be talking to our customers in a true reflection of how they're showing up in their cycling lives nowadays. So it has shifted a lot. so in many ways The prince of one thing or the king of everything. I think we can be the prince and king of cycling because I think cycling in the way that it manifests and it still, for me, it is still the sort of the pointier end of cycling.

[00:19:19] Fran Millar: It's not line bikes. It's probably not people on Brompton because at the moment the predominant product range that we have is Lycra. So we want people out riding their bikes and doing it as an actual physical activity. I think we can absolutely move to commuting over time, but for now it's that pointy end of the sport that's really important for us to win back.

[00:19:37] David Sadigh: We are seeing, a bit of the same like type of challenges between tennis and padel at the moment, I don't know if you have been following a bit the brands like trying to conquer a paddle, but it, reminds me a bit of the gravel trend and how legitimate brand from cycling or like trying to enter, but also like newcomer brands as well.

[00:19:54] Robin Swithinbank: Yeah,I wanted to pick up on this, male female split. You said 85 to 15 male to female. I was reading [00:20:00] a little bit earlier this year about MAWIL middle-aged women in cra, which, is an even worse term, I think, than mammal. But, uh, there are clearly women who are interested in cycling. that's an obvious thing to say, but it's interesting that only 15% of your customers at the moment are women.

[00:20:14] Robin Swithinbank: Are you looking to increase that percentage? 

[00:20:15] Fran Millar: Definitely, I think it's interesting as well, 'cause it depends in what territory, you know, in APAC that jumps up to about 30%. In China it jumps up to about 40%. So, depending on the territory, we see a very different demographic of people coming into the brand and participating in the sport.

[00:20:29] Fran Millar: and that's one of the other unique things about Rapha, is we are a truly global brand with a truly global community. You know, we have 23 clubhouses across the world. we are represented in about 40 different chapters of our club. we sell all over the world.

[00:20:42] Fran Millar: So I think making sure that we are aware of. Cultural nuances with how people are riding their bikes is really important. but for me, female cycling, women's cycling has been on this exponential growth trajectory for the last 10 years. Whether that's a competitive level or participation level.

[00:20:57] Fran Millar: And Lots of sports brands will know the kind of pink and trinket [00:21:00] approach that, I think many brands have tried and it doesn't work. And I think Rapha has been one of the few pioneers of making sure that there's female. Specific product available and that it's tested on women by women, that it's built for women in the riding experience that women have.

[00:21:14] Fran Millar: I would like to keep pushing on that area and I think making sure that we as a brand are the product of choice for female cyclists. I'd absolutely want that to be one of the key pillars of the growth strategy in the next 10 years of the brand. Because I think, like I say, whether it's Strava, whether it's wt, whether it's any of the kind of, participation indexes that you look at, the one area that's getting double digit growth is women.

[00:21:35] Fran Millar: So it would be naive of us not to go after it and really make sure that we're catering to it properly.

[00:21:40] Robin Swithinbank: Let's move away from the specifics of Rapha and more to your approach and your mindset. you've obviously worked in elite sport and with some of the most focused and win centric people on the planet, whether that's the Dave Marginal Gaines Brailsford, or the Tour de France winners, sir Bradley Wiggins, Chris Froom Thomas people.

[00:21:56] Robin Swithinbank: I love watching the 2010s. does the world of business in [00:22:00] some way seem quite low wattage to you by comparison to the thrills and spills of being on a a cycling team?

[00:22:05] Fran Millar: I wish, no. Do you know, like speaking openly, I, one of the reasons when Ineos asked me to go and run Belstaff, the reason I wanted to do it was I had done, 15 years effectively within the high performance cycling world, whether that's as an agent or as the boss of a team. And then I had done the Eliud Kipchoge sub two hour marathon project.

[00:22:24] Fran Millar: I'd been operations director of that. Going into that project, the Kipchoge project, it was, you know, we had to galvanize a team. We had to get six disparate groups of people to work together. We had one overarching objective. we weren't gonna make him fitter in the six months that we had to deliver that project.

[00:22:37] Fran Millar: So the only thing we were gonna be able to do was to improve execution. So it was like, can we take to the marginal gains point, can we take every single aspect of this performance and improve it by 1%, 2%, and, and therefore deliver what we needed, which was 26 seconds. and obviously we were able to do that and then some.

[00:22:52] Fran Millar: And what I was interested in having taken everything I had sort of learned, seen, and been a part of in cycling and applied it at a small level to [00:23:00] a different sport, I was like, Hmm, I wonder if you could take this stuff and apply it somewhere else. And, you know, ultimately the biggest influence on my personal and professional life.

[00:23:08] Fran Millar:  by a Country Mile has been Dr. Steve Peters. his approach has always been that it excellence isn't subject specific. It's not like I'm going to be excellent at cycling, or I'm going to be excellent at business. Human excellence comes from the same place and the approach that you take.

[00:23:25] Fran Millar: To engender excellence within yourself and with within others is replicatable in any environment. But you just have to know the principles of it. And I think that taking a that and taking the sort of the methodology, the thinking, the approach and seeing if I could apply it in a completely different environment was what really motivated me.

[00:23:42] Fran Millar: And doing it in Belstaff and being like, oh, okay, that quite a lot of this works. Some of it doesn't, but quite a lot of it does. So then to be able to come into Rapha and be like, right, can I take now what I've learned at Bell staff and do it in an environment where. Performance is still very much part of our DNA, so it's like you can, I can dial up some of the performance [00:24:00] stuff that I've had. In my experience, I couldn't dial up a Belstaff, but I can really dial it up here. So yeah, I think it, it's been, it's not lower wattage. It's, if anything, it's more stressful because there's so many more variables in my mind. Like I can't control customer behavior, but we can train athletes to. You know, you can measure how an athlete is gonna perform, what's they need to put out, how they need to develop from a, VO two perspective or any of those sorts of things.

[00:24:26] Fran Millar: And you can, can't control the environment necessarily, but you can certainly control more of the parameters. You come into a business environment and it's you've got to grow your customer retention, or you've got to grow your A OV, or you've got to go and I'm like, wow, the variables seem huge.

[00:24:38] Fran Millar: Now, that could just be a lack of familiarity, but I feel far more that it's more complex doing this than it was doing a professional sports team.

[00:24:46] Robin Swithinbank: Controlling the weather versus controlling the consumer, which is harder to discuss. Well, no, maybe that's for another time, David.

[00:24:52] David Sadigh: Uh,yeah, no. I said you, you literally created, a winning behavior framework, at Rapha using your 2013 Team Sky [00:25:00] Playbook. how does that translate? are you treating like the Rapha team, like athletes and how specifically?

[00:25:08] Fran Millar: So not training them like athletes, but definitely thinking about what are the areas where you have the biggest impact on human performance. because it's like, people work best when they have a certain set of parameters like. Do they know what their role is? Do they know how they're being measured?

[00:25:24] Fran Millar: Do they understand how they're gonna get rewarded and recognized? Do they have the tools they need to do the job? are you creating an environment where they feel safe to challenge and question and interrogate? it's all of those things from all of those business books are the things that actually at the sort of where the rubber hits the road.

[00:25:41] Fran Millar: That is what makes a difference. And I think if you can create an environment where people feel psychologically safe. Where they understand the direction they're going in, where they're given the support and the tools they need to do the job. And you'd relentlessly pursue that, like over and over again.

[00:25:54] Fran Millar: Oh, do we know where we're going? Are we measuring it? Do we know if we're on track? How do we course correct? And you're [00:26:00] constantly doing that cycle that is high performance in any environment. so yeah, that, that's what I did. Basically. I took that approach that we had used within Team Sky.

[00:26:09] Fran Millar: And the only reason I actually did the Team Sky thing specifically. Here, and I didn't do it as specifically at Bell Staff, is that when I was thinking about my first team day and what I wanted to do within Rapha, I went back and looked at all of my old materials. And the deck that we had used in 2013 in Mallorca to the team was when Bradley and FMI had both won a tour and it was in the November camp.

[00:26:31] Fran Millar: And it was the actual PowerPoint presentation that we had used, and it was all about how do we build a team that has changed so fundamentally over the course of the last three years, went from being these British upstarts who'd never won anything except stuff on the track. Would never won anything on the road to winning the Tour de France twice with two different riders in the space of a year.

[00:26:48] Fran Millar: And it was like that. Piece of work. When I looked at it, not only was everyone wearing Rapha, because we had, it was the first year we were sponsored by Rapha, so it was like beautiful. But it also spoke to [00:27:00] all the things like, what got us here won't get us where we need to go. And I, I joined the business at the 20 year anniversary point.

[00:27:07] Fran Millar: So it was like all of that history, all of that stuff that's come before. It's really important and it's the plinth that we stand on, but if we're not careful, it's going to be the cage that keeps us in and we have got to find a way to move forward. And it was exactly the same message that we had at Team Sky.

[00:27:21] Fran Millar: So it felt, pretty prophetic. And I was like, I'm just gonna use this. and they loved it because there's pictures of athletes and they're cycling and it's something they were involved in and there's Rapha logos everywhere. So it just felt very symbiotic and a good opportunity.

[00:27:33] David Sadigh: So where can we find it? Because I'm passionate about 

[00:27:35] David Sadigh: culture and like winning culture. I would love to read it. or

[00:27:38] David Sadigh: is 

[00:27:39] Fran Millar: confidential material. I might be able to send you a little copy of it, David.

[00:27:42] Robin Swithinbank: Does the same apply with marginal gains? I mean, team Sky today, brail for this whole business of marginal gains, finding the 1%, it was an integral part of the philosophy that made the team so successful. you, a lot of what you've talked about sounds at a fairly top level. This is. The structure that we create and the the environment that we're going to create in which our people can well perform.

[00:27:59] Robin Swithinbank: [00:28:00] Um, but does it go down to a granular level as well? Are we, are we looking for marginal gains on a daily, on a weekly basis in the business?

[00:28:05] Fran Millar: I think you get there. I think you do get there. I think there is a, I think when you're in this level of turnaround with this level of turmoil and this amount of change, the big bits are so important that you're not at the marginal gains stage yet. Do you see what I mean? Like when you think about what marginal gains was actually brought in to do, it was like.

[00:28:23] Fran Millar: We, we are at 85% of performance and we need to get an extra 15% because, potentially we think people are doping or whatever else. So you then go out and you look in pros four and you're like, finding 15% is gonna be really hard, but you've already done the 85 90, right? You've already done that bit.

[00:28:38] Fran Millar: And I think, we've got to do, we've got to get to the 90 before we start looking for the incremental ones and twos here and there that take us from really, really good to absolutely excellent. Um, and we're probably about a year away, in my view, from having those really big building blocks in place to start looking for the, what I would consider the discretionary benefits of chipping away at the 1%.

[00:28:58] Robin Swithinbank: Interesting.

[00:28:59] David Sadigh: I would love [00:29:00] to know a bit more about your retail strategy and, how do you plan to expand? What's the mix? do you really believe in like those omnichannel strategies? Basically what's the game plan and, it seems that you have strong conviction. What are they?

[00:29:13] Fran Millar: so I love the way that it's like leading the witness. Do you really believe in that omnichannel 

[00:29:17] David Sadigh: I'm trying to become a podcast. I'm trying to become a podcast interviewer. Be nice to.

[00:29:23] Fran Millar: I am. Listen, I think the customer experience nowadays, omnichannel and inverted comm is important, but it's basically a delivery and operations piece, right? It's like if I buy something online, I wanna be able to return it in the store. I want the experience in the service proposition to be the same.

[00:29:36] Fran Millar: I think where we are very different is that our retail proposition is the heart of our community. and community for us isn't, just the odd thing here and there, and getting a group of people together we have, from every single clubhouse, we have weekly rides going out.

[00:29:50] Fran Millar: Anything from, you know, tens to hundreds of people who come and ride with us on a weekly basis who have 4,500 rides this year alone. We have over 450 [00:30:00] ride leaders out in the world leading rides for us across the globe. So our retail proposition is absolutely at the heart of that. So we want to ensure that we are creating a clubhouse environment and that is a challenge because ultimately, you know, as I'm sure many of your other guests, and I'm not from a retail background, right?

[00:30:18] Fran Millar: Density per square foot and all of those sorts of things that I've learned about at Belstaff. You come here and it's not relevant or as relevant because you've got a clubhouse, you've got a coffee shop, you've got, yes, there's the store, but there's also the community managers. There's the community evenings, there's the ride outs, there's everything else.

[00:30:34] Fran Millar: So they're at the heart of our channel mix and proposition. But for a set of different reasons to what a traditional retailer or a traditional apparel brand would use them for. that being said, they need a huge amount of improvement. So our clubhouses were an amazing jewel in our crown 10 years ago, but they have increasingly been allowed to, they get, like a lot of what's happened in the business, they've, they've become a bit of a jack of all trades and a master of nuts, like [00:31:00] depending on the.

[00:31:01] Fran Millar: the CEO at the time, or the, the person's opinion at the time is like, they're really important, but they're shops, you know, so we have a, our Tokyo Clubhouse is at the top of Cat Street, you know, one of the most commercial retail footfall locations. Not great for riding, but then you have like our Brewer Street Clubhouse, which is a true clubhouse.

[00:31:17] Fran Millar: You know, it's 25% of the footprint is a coffee shop. We are riding from there 10 to 12 times a week. We've got hundreds of people coming through the door on bikes. So you've got this bizarre mix of things. So one of the big pieces of work that I'm doing with our clubhouse and community director is to really work out what is the role of a clubhouse in each of the territories.

[00:31:36] Fran Millar: How do we make those clubhouses feel clubhouse and community focused? But how do we also make sure they're not a millstone on from a p and l perspective because. if they're not making money from a commercial perspective, everyone will be like, oh, but they're for the community. And if they're not driving community, everyone's like, why?

[00:31:49] Fran Millar: They're not making any money. And I'm like,Find the trade off, agree on that, trade off, and then go after it. So we've done a big piece of work on that. So we are not gonna be expanding the footprint right now. We're gonna be getting [00:32:00] that footprint absolutely optimized and making sure that we are delivering the promise to the customer and the community that we say that we will.

[00:32:08] Fran Millar: We're just about to open in Shanghai. so that will open at the end of November, and that's the newest version and iteration of the clubhouse. in our new brand world, much more elevated, The community is absolutely at the heart of it and much more about how do we integrate retail into the community experience as opposed to bolting either one of those things on.

[00:32:28] Fran Millar: and I think that test and learn proposition in Shanghai will then inform. All of the relocations or refits that we do over the course of the next two years.

[00:32:36] David Sadigh: It's interesting that, you do the first one in Shanghai. Is there like a specific reason?

[00:32:41] Fran Millar: a host of reasons, actually. I think first and foremost, it's a relatively discreet market. China is a different space. It's a different market, and I think we can try things there that we maybe would be less willing to try in some of our more established territories. So, new look and feel, new experience, new community.

[00:32:56] Fran Millar: Tests, et cetera. it's also a huge growing market. [00:33:00] I know China has been in trouble and everyone's worried about China from a luxury perspective, but from our perspective, cycling is absolutely booming in

[00:33:06] Fran Millar: China. And we wanna be at the forefront of that.

[00:33:09] Fran Millar: we have been the leaders in the marketplace for a long time, globally. We didn't wanna be on the back foot in, in China. So it felt like Shanghai was a really good place. We already had a community there. We've been working for the last 18 months to build our club in China. and certainly in Shanghai we had a thousand women join us across China for our women's 100.

[00:33:26] David Sadigh: So we've got this really interesting traction that it just felt like too good an opportunity to miss. just on the China topic, Robin and I, did our homework ahead of this interview, and, we've noticed that, you also launched your team also in 2024, if I'm not mistaken. what have been the results so far, and, uh, your vision for Raffi in the Chinese market?

[00:33:44] Fran Millar: it's interesting actually. we had a really good start on Tmall and jd. We had a little bit of a tail off and some of our competitive brands came into the space and quite aggressive in their discounting strategies and how they went after it. And we've actually, we've been really, disciplined with how we've approached the market.

[00:33:59] Fran Millar: We've kept a [00:34:00] full price proposition. We've really tried to maintain a luxury position. We've really worked hard to maintain it. A very product focused and product marketing focused approach. We want people to understand that our product is best in class. It's highly engineered that it's, that we make it all all ourselves.

[00:34:15] Fran Millar: That we develop each of our patterns and fabrications. So we've been really focused on that in China because I think that market, whilst it's new to a cycling perspective, they're a very educated market about product. And so making sure that we are. Delivering a product promise and a community promise in China that sets the standard for how we then wanna be globally.

[00:34:34] Fran Millar: so we're currently ranked number one on both Timor and jd, so that's been for the last couple of weeks. 

[00:34:39] Fran Millar: Um, obviously in premium cycling apparel, but that's the area that we're interested in.

[00:34:42] Fran Millar: so it's a really interesting market.

[00:34:44] Fran Millar: We've got a new country manager out there who's doing a great job. So yeah, it's a bit of a test and learn. I know nothing about the Chinese market, so I'm learning at the same time, 

[00:34:52] Fran Millar: which is always 

[00:34:53] David Sadigh: So does it mean that you are like selling the same SKUs and the same product assortment on Tmobile that you sell [00:35:00] offline?

[00:35:00] Fran Millar: Yeah, the same product assortment. we have local, buyers who are, and allocators who are choosing that range. So choosing from the main range, because I think there's a, there's quite a lot of, market specificity around what works and what doesn't. And I think what our allocators would choose versus what our local country manager has now started to pull in are actually quite different.

[00:35:16] Fran Millar: And then the nuances around what the market is going after are and it's interesting, we're seeing. Really great traction in some of the really classic Rapha product. the kind of brevet product, the classic product with the white armband. the stuff that is iconically Rapha, that is getting huge traction.

[00:35:31] Fran Millar: whereas obviously in, in more of a western market, you're seeing much more of the prints, the bright colors, all that sort of stuff, which definitely it's just a different demographic.

[00:35:38] Robin Swithinbank: Fran, I'm gonna have to bring this conversation across the line at some point, but,I wanted to reflect on something that you said in the past about, achieving the impossible. quite clearly many people, outside, the uk but obviously inside the UK as well, would've thought it would be impossible, that British Rider.

[00:35:52] Robin Swithinbank: Could come to dominate the tour of France for a decade as indeed they did. Thank you for all the joy you brought us, by the way, for that. but the reports don't lie. Rapha is on this [00:36:00] eight year losing streak, is turning it around. Impossible.

[00:36:03] Fran Millar: No. Definitely not. It's got incredible potential. It's massively under potentialize. It's, I think by its own admission and the admission of those who've come before me, it's been poorly managed. and the strategy has been poorly executed. So I think the fact that we are still where we are from a revenue perspective and EBITDA perspective speaks to the strength of the brand, and the opportunity of, and the size and scale of the opportunity.

[00:36:24] Fran Millar: So we've just gotta get it right. Like we can't afford to make many more mistakes. So it's, uh. Everything we do at the moment is the one roll of the dice analogy I've got with everyone. It's like we're doing this once. We're not doing it several times over.

[00:36:36] Robin Swithinbank: David.

[00:36:37] David Sadigh: Fran? Yeah, no, we, we can let you go. Uh.Without asking you a question about artificial intelligence,we just finalize a AI adoption survey for the luxury and fashion industries. and, the results are like,striking. 71% of the brands say AI adoption cannot be delayed yet.

[00:36:55] David Sadigh: Most are stuck experimenting. consumer insight and everything related to the [00:37:00] market research. You mentioned also Strava. Looking carefully at what's happening is like one of the top priority, but training and data quality are actual blockers. as you turn Rapha around. Is AI genuinely part of your strategy and how specifically you.

[00:37:14] Fran Millar: so I think the key there about the data and training is such an important point. I think AI is for me, like anything, it's a business facilitator and the quality of what goes in is gives you the quality of what comes out. so we've actually decided to work in an enterprise agreement with Google.

[00:37:29] Fran Millar: we recognise that as a business with the amount of stuff that we have to focus on from anoperational infrastructure perspective. We can't do it on our own. and trying to do, you know, we'll just be doing too much test and learn to bring AI in, commas in ourselves. So we're going.

[00:37:43] Fran Millar: Isn't it? It's ai. It's okay, great. What does that mean? but I think do I believe that the, that there is a role to play for the LLM work and what we're seeing in terms of automation and improvement in operation from, supply chain all the way through to customer delivery.

[00:37:56] Fran Millar: Yes, of course. but we intend to work with a partner to help us do that and [00:38:00] to be doing it in the places where we think it can have the most impact on the customer. so one of the biggest projects actually, that we're working on at the moment is a consolidation of customer data. We've got an incredible amount of, transactional data for our customers over the course of the last 20 years.

[00:38:11] Fran Millar: All of it sitting in different places. so pulling that all in, consolidating it all, and then enabling us to then empower our teams and our people to utilise AI tools to, to mine that data,  that's the biggest opportunity for us that we're going to go after first.

[00:38:26] Robin Swithinbank: Nice, gentle question to, end our

[00:38:28] Fran Millar: I know.

[00:38:29] Fran Millar: I know. 

[00:38:29] Robin Swithinbank: me. well, this is what happens when you get a tech entrepreneur and, the CEO of a high-end fashion cycling brand and a journalist, in the room, the journalist who, has a natural aversion to all such advantages, but for all sorts of different reasons.

[00:38:41] Robin Swithinbank: I like the way you describe it, has been complimentary rather than a replacement. And, well, let's stick with that thought as we move,into thanking you, so much for your time and for joining us on the luxury. Society podcast, we wish you, great success with, the Rapha turnaround.

[00:38:52] Robin Swithinbank: And, look forward to hearing how it pans out. Thanks.

[00:38:55] Fran Millar: Thank you very much guys.

[00:38:56] Fran Millar: Nice to meet 

[00:38:56] Fran Millar: you. 

[00:38:57] David Sadigh: Absolute pleasure. Thank you, 

[00:38:58] 

[00:39:00] Robin Swithinbank: so let's move the conversation on and head over to China and Shanghai, where we find friend of the Luxury Society podcast.

[00:39:06] Robin Swithinbank: Max Peiro founder and CEO of dlg sister company Rehub Max. Welcome back. How are you?

[00:39:12] Max Peiro: I am good. Thanks Robin. It's great to be back.

[00:39:15] Robin Swithinbank: Yeah. Good to see you. So, um, now you've just published your most recent Compass Index. Before we get into the weeds of that, remind us quickly, what is the Compass Index?

[00:39:24] Max Peiro: the Compass Index measures brand momentum across China luxury digital landscape. Showing us which brands are leading and which ones are falling behind. We calculated every quarter, using our own data from tracking over 150 luxury and premium brands across e-commerce and social media platforms, allowing us to have real time intelligence on brands performance in China.

[00:39:49] Robin Swithinbank: Cool. Now since you and I last spoke, we've had your DLG colleague Jack Roy, on the. Podcast and he's been talking with growing confidence about the luxury landscape in China. Now, from where you [00:40:00] are sitting and based on what you've reported through this latest compass index, is he right to be optimistic?

[00:40:05] Robin Swithinbank: Is the landscape improving?

[00:40:07] Max Peiro: Yes, I would say that cautious optimism is justified. what we saw is that Q3 marked a real turning point after several quarters of slow down in China. And brand momentum is speaking up again despite having tighter marketing budgets. Obviously not every brand is growing yet, but even for the brands that are declining, this decline is slowing down.

[00:40:33] Max Peiro: And one aspect that I found very encouraging is that leather goods, which is a crucial category for fashion brands, grew 22% year on year during Q3. After also several quarters of decline.

[00:40:49] Robin Swithinbank: Interesting. So there are real green shoots. would you expect to see these continue to grow through Q4 and into 2026?

[00:40:56] Max Peiro: I, I think so. and I truly hope so. I think that [00:41:00] there are two elements that will define the performance in Q4 and later in, in 2026. First of all. Product relevance. Q4 is a decisive quarter driven by fall winter seasons. So we have ready to wear, we have accessories playing a central role in driving performance, and also we need to see these consolidations of leather goods category.

[00:41:25] Max Peiro: Then looking ahead of 2026, I think that we should benefit from new creative energy. as we know there are leading Amazons. Like Chanel, like Dr. With, new creative directors, and this is gonna be the first full collection after them. So I think that,the anticipation is very high after the recent fashion weeks.

[00:41:44] Max Peiro: So besides product relevance, the second point that I think it's crucial to see, this performance is. Marketing, investment and local activations. we all know that it's been an extended period of tighter marketing budgets, so it's time now for brands [00:42:00] to reinvest in China and to really focus on truly connecting with Chinese consumers and to be very sharp on driving commercial results.

[00:42:08] Robin Swithinbank: We'll come to those Chinese consumers and who they are and indeed where they are, in just a moment. But, this new climate that you are starting to see emerge, you've talked about leather goods being a category which is growing. Are there winners in this climate? Is everyone winning or are there some winners and some who are struggling to win, should we say without saying losers?

[00:42:26] Max Peiro: Not everyone is winning. in fact,the market is becoming increasingly polarized. speaking first at cat category level, ready to wear remains very strong. Leather goods, as I mentioned, it's finally rebounding. And also we see accessories and jewelry showing positive traction, particularly at entry level price points.

[00:42:48] Max Peiro: When it comes to brands, the trajectories, across brands are very different. In premium ready to wear. Brands like Ralph Lauren or Icicle are [00:43:00] performing extremely well in leather goods. We see brands that, that are having also a global momentum. So China is just an extension to it, like, like coach or like, leading this recovery.

[00:43:12] Max Peiro: But interestingly, we also saw. Emerging brands like Sunman that are very strong performance. And then when it comes to jewelry, Amazons like Cartier or like Van continue to show solid traction.

[00:43:27] Robin Swithinbank: Yeah, that's interesting. You've mentioned a couple of Chinese brands in there and, we start to wonder, I suppose, whetherthis. Recovery is in part, and it may only be a really small part, I don't know, but, how much of this, recovery in the market is driven by a new generation of Chinese premium and luxury brands?

[00:43:42] Max Peiro: I, if we look in terms of market share, obviously, Chinese brands represent a very small share of the market, but some of these brands are gaining real traction. and I'm gonna, I'm gonna mention too, as an example, I know that. a lot of people are talking about [00:44:00] Lapu Gold, for example. and it became very popular.

[00:44:02] Max Peiro: But I want to talk about two specific brands. Uh, one is Sanon in Leather Goods. They're, performing strongly thanks to a very smart merchandising strategy. balancing design, but also value for money, which is a very important aspect, nowadays, and then a very strong and authentic storytelling.

[00:44:20] Max Peiro: On the other hand, we have Icicle, which is a ready to wear brand, that continues to grow very strongly with their sustainable timeless approach. Some some people call it the Chinese Max Mara, and I think that there are some similarities. both brands, Sanon and Icicle, they rank among the top performance in our rankings.

[00:44:41] Max Peiro: Both of them are showing mid double digit growth and outperforming most of their, international competitors.

[00:44:48] Robin Swithinbank: Well, that's a very interesting development and, maybe that will continue to shape Q4 in 2026. Beyond, that maybe you are in the business of making predictions, I don't know. But, would you expect to see these Chinese brands become [00:45:00] increasingly important to the Chinese luxury market?

[00:45:02] Max Peiro: I think that we will see more and more brands consolidating their importance, obviously first in the Chinese market. obviously we're talking more at the entry levels of luxury. as we know, heritage plays a very important role and obviously, these brands like the Heritage, but in the entry level premium segment in, in, in.

[00:45:21] Max Peiro: Leather goods and ready to where we'll see more and more brands consolidating, their relevance. And also, I'm not in the business of, fortunetelling, but I would expect some of them starting to expand internationally over the next few years.

[00:45:37] Robin Swithinbank: Well, that really will be an interesting development. But let's, well, sticking with the international theme, let's talk briefly about the role of outbound Chinese tourists and the future of luxury consumption. Before COVID, Chinese consumers appeared to spend far more when traveling than at home.

[00:45:51] Robin Swithinbank: By this sort of commonly accepted ratio of around 70 to 30 COVID regulations, of course, ended that season. Where are we now in that respect and where are we heading?

[00:45:59] Max Peiro: I, [00:46:00] I think this is a very important point 'cause we often focus on the domestic market and analyzing the performance at China, geographically, but we forget how crucial. Overseas spending by Chinese consumers is for luxury brands. based on,on, on publicly available data, my understanding is that right now, Chinese travel consumption is roughly back to 2019 levels, but not evenly.

[00:46:24] Max Peiro: Europe, which was a key driver for this consumption, is still around 60% of pre COVID levels. While, regions like Japan, as everyone is aware of, also broader Asia Pacific region or even emerging destinations like the Middle East, are seeing strong, growth. And I think that, Chinese consumers.

[00:46:46] Max Peiro: preferences change. The travel habits also change. So I think it's no longer useful to look at the past to really predict what's coming next. I think that, we'll see more and more, [00:47:00] differences in the next few years versus what we're used to see, pre COVID.

[00:47:03] Robin Swithinbank: Yeah, I suppose that makes me wonder whether you've been able to identify any purchasing behaviors, In other words, are there specific drivers that motivate overseas spending compared to domestic spending among Chinese consumers?

[00:47:16] Max Peiro: Yes. before, the main reason Chinese consumers bought luxury good goods overseas was number one, limited product availability in China. Number two, the significant price gap with Europe on point number one today, availability is not longer an issue. Luxury brands now offer the full assortments locally as China is a crucial market.

[00:47:40] Max Peiro: What remains is point number two, the price factor and consumers are. Extremely savvy when they want to make a purchase. They research prices online. They compare across different markets, and they even check the gray market before making any purchasing and in many [00:48:00] case, nowadays, it's actually cheaper to buy through the gray market in China than to buy the same product in European boutiques, and consumers are fully aware of that.

[00:48:12] Robin Swithinbank: Yeah, I was gonna ask you about the gray market, the Chinese gray market, which we talked about on this podcast before, and recognized it as a growing threat to luxury brands. for good or real. What developments are you witnessing here?

[00:48:24] Max Peiro: first it's important to, to clarify for the audience that when we talk about the gray market, we're talking about genuine products, not counterfeit products. I think that the main. Point to highlight is how professional this ecosystem has become from supply chains to selling channels, even the customer experience.

[00:48:48] Max Peiro: this is something that it's completely normalized in China and consumers don't see it as something to hide anymore, but simply, another. Legitimate way to buy luxury, [00:49:00] especially considering this significant price gap that still exists between China and Europe.

[00:49:03] Robin Swithinbank: Interesting. Let's just, boil this down. Sum it up for us if you can. As you review the years so far, and look ahead into the critical final quarter, what are the key takeaways from this latest compass index?

[00:49:14] Max Peiro: if we look at the year so far, it's been one of adjustment and stabilization after a pretty tough start. On, H one, Q3 finally show the first real signs of recovery. As we move into Q4. the clear focus is on consolidation. Really sustaining that momentum and translating it into consistent growth.

[00:49:38] Max Peiro: This will be a decisive quarter for brands to prove they can turn earlier recovery into more lasting traction. Then looking ahead into 20 and 26,I see stronger growth potential, but with the market becoming even more selective, I still expect farther polarization between brands. [00:50:00] brands that can adapt and those that cannot, and in my point of view, success will truly depend on how fast they can align product pricing and execution to where the real demand is.

[00:50:12] Robin Swithinbank: Yeah, that's really interesting. and that chimes very, tightly with what Jack was saying, that, in the past we've had a season where even the losers were winning. Whereas if the polarization continues, then we're likely to see a scenario where actually the losers are losing. and, the winners become, as you say, more selective.

[00:50:29] Robin Swithinbank: Well look in that light. Just a final thought. what are you advising your clients at the moment as they look to navigate and take advantage of an improving climate in China?

[00:50:38] Max Peiro: Our advice to clients is simple move with precision. the market is improving, but it's becoming more selective, so it's. All about aligning fast where the real demand is. That means relying on fast data-driven insights to adapt product pricing and [00:51:00] activations, and being able to turn those insights into a real commercial action.

[00:51:04] Robin Swithinbank: Brilliant. Great. Max, we must leave it there. Thanks as ever for coming onto the Luxury Society Podcast and talking to us about the findings of the Compass Index. I'm sure we'll talk to you soon.

[00:51:13] Max Peiro: Thanks, Robin. 

[00:51:15] Robin Swithinbank: Thank you for listening to the Luxury Society Podcast. If you've enjoyed this episode and would like to hear more, don't forget to subscribe. And if you want to go deeper into any of these topics, check out luxury society.com where you'll find stories, insights, and profiles that unpack what's going on in the world of luxury right now.

[00:51:33] Robin Swithinbank: I've been your host, Robin Swithinbank, and this has been the Luxury Society Podcast available on Apple, Spotify, and wherever you get your podcasts.