MILAN — Despite its financial woes, Fila is branching out with three licensing agreements in Australia, Brazil and North America.
This story first appeared in the August 8, 2002 issue of WWD. Subscribe Today.
Fila signed footwear and apparel licensing deals with its former subsidiaries in Australia and Brazil, and a children’s wear deal for the U.S. and Canada.
The pact with Australia’s SM Brands will last for 10 years, while a similar agreement with Sport Marketing Brazil will hold up through December 2006.
Fila’s North American deal is with Haddad Apparel Group, based in New York, to design, manufacture and distribute Fila Kids apparel lines in the U.S. and Canada. Fila said this year’s holiday collection will be the first to hit the market. The Haddad deal has no specified expiration date.
“The partnership with Haddad will improve Fila’s brand penetration in the American and Canadian markets by leveraging from our partner’s experience in children’s business,” chief executive Marco Isaia said in a statement.”The two new core license partnerships will improve Fila profitability through the royalties flow and reduce overall structural costs,” Isaia said, referring to the Australian and Brazilian pacts. “In the past couple of years, the fixed expenses associated with the two subsidiaries together were around $13.5 million [converted from euros at the current exchange rate] a year.”
Fila said the new license agreements will boost business late this year but the company did not provide precise sales targets.
Fila has posted losses for the past four years. Most recently, its second-quarter net loss widened to $34.3 million from $30.2 million the year before, suffering mostly from a $14.2 million write-off on its struggling British unit.
Holding di Partecipazioni Industriali, which owns 71.8 percent of Fila, has been trying to sell the sports brand since June 2001. In December, HdP said it was in exclusive talks with the U.S. fund Continental. But since then, HdP has said it is talking to more than one prospective buyer, although a spokeswoman said she could not name the parties.