Fila's new management team wants to grow the Italian active lifestyle brand into a $1 billion global business.
Yoon-Soo "Gene" Yoon, chairman of Fila and holding company Global Leading Brands House, who led Global's buyout of Fila this year, said in the next three years he could more than double Fila's $400 million to $500 million volume.
To do this, Yoon said Fila would first improve product; second, segment its distribution channel to take the brand both high end and mass, and, third, focus on U.S. wholesale distribution.
"We must focus on turning around the U.S. business first and then translate that around the world," Yoon said. "We have 16 retail stores in the U.S. now, but we are not successful at retail at the moment. We must make it in wholesale here first."
During a news conference in Fila's Madison Avenue store Tuesday night, Yoon announced a new licensing model, through which Fila will license all production except in the U.S. This model takes its inspiration from Yoon's own experience with the company, which began in 1984 when he became its first footwear sourcing agent in South Korea.
The final element in the "rebirth of Fila" will be streamlining Fila's costs. The new owners let go most of Fila's former management; Yoon introduced some executives as "the few people we decided to keep on."
Within four years of buying Fila, Sport Brands International Ltd., a company within private equity firm Cerberus Capital Management, sold Fila Luxembourg, which holds the rights to the worldwide use of the Fila brands and trademarks, to Fila Korea. Fila Korea acquired the firm by buying all capital stock of Fila Luxembourg for an estimated $350 million.
Yoon said he did not buy Fila to flip it. "The only reason we bought it is because we love it," he said. "I have been with Fila for 23 years, so I am sure I know every corner of the brand, and I am going to try not to repeat the same mistakes I have seen other owners make over the years."
As an example, Yoon pointed to Fila's endorsement contract with pro basketball star Grant Hill, whom he said Fila paid about $1.5 million a month for several years."Some past management groups thought of Fila as an Italian luxury brand," he said. "They were wrong. It's an Italian authentic sportswear brand."
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