MILAN — Fila managed to narrow its second-quarter operating loss by cutting costs, but the bottom line still sank deeper into the red because of a write-off on its struggling British unit.
Concurrently, Fila asked shareholders to approve special measures designed to recapitalize the company, which has endured losses in the last four years. Among these moves, contingent upon shareholder approval, would be dipping into company reserves, executing a capital increase and enacting a 1-for-2 reverse stock split. A special meeting to vote on these proposals will be held Sept. 23.
The net loss for the quarter ended June 30 widened to $34.9 million from $30.7 million in the prior-year quarter. However, because the company issued new shares last year, the loss per share contracted to 57 cents per share from $1.10 the year before. Dollar figures have been converted from the euro at current exchange rates.
Despite sponsoring athletes like tennis star Jennifer Capriati, Ferrari driver Michael Schumacher and skier Alberto Tomba, Fila hasn’t managed to capitalize on its high-profile brand and pull itself into the black.
Sales fell 1 percent to $202.7 million, although Fila said they would have risen by 2 percent on a constant currency basis.
Cost-cutting narrowed the operating loss to $4.5 million from $15.1 million the year earlier. However, Fila’s bottom line suffered the greatest damage from a $14.5 million write-off on goodwill in Fila U.K.
"The write-off was required to recognize adverse changes in the business climate since Fila acquired Fila U.K., because, despite the expected operating improvement of the subsidiary, an immediate return to past conditions is not foreseen," the company said in a statement.
Losses on foreign exchange came to $1.7 million against a gain of $348,000 the year before. The U.S. dollar depreciated by 5 percent against the euro on a quarterly average basis, Fila said.
Holding di Partecipazioni Industriali, which owns 71.8 percent of Fila, has been trying to sell the embattled sports brand since June of last year. In December, HdP said it was in exclusive talks with U.S. fund Continental Partners. But that situation has changed. HdP is now talking to more than one prospective buyer, a company spokeswoman said.Apparel sales rose 9 percent to $108.7 million, while footwear sales dropped by 12 percent to $84.6 million.
Citing a 33 percent jump in sales at its Enyce brand, Fila said U.S. revenues advanced by 16 percent to $63.2 million. Lower sales in France and the U.K. pushed down European sales by 14 percent to $53.4 million. Sales in the rest of the world fell by 3 percent to $76.8 million as strong sales in Korea offset a drop in sales in Argentina and Mexico.
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye
“It’s passion that helps get anybody to a certain point and it’s what’s propelled me,” said Kith founder @ronniefieg, one of WWD’s 40 under 40: a group of industry notables who are changing the face of retail, fashion and beauty. Fieg, who opened a Manhattan flagship on October 7, began his career at age 13 as a stock boy and salesman for footwear chain David Z. “I think staying true to [my] beliefs, hard work and passion have gotten me to where [Kith] is today.” See the rest of the 40 at WWD.com. (📷: @vsteves) #wwd40
25-year-old @samweaving is about to break out this fall, starring in Netflix’s horror film “The Babysitter,” fittingly out today on Friday the 13th. That’s not the only place you’ll be seeing her, though — Weaving’s got a role Showtime’s “SMILF” and another alongside Frances McDormand and Woody Harrelson in “Three Billboards Outside Ebbing, Missouri.” Though she’s got a full plate at the moment, there’s one role she’s got her eye on: Marilyn Monroe. “I’m a little too young at the moment, but it’s on my bucket list,” the actress told WWD (📷: @dandoperalski) #wwdeye
BFF's Poppy Jamie and Suki Waterhouse celebrated the launch of their bag line Pop x Suki at Nordstrom last night. "The line is really about our friendship, and how we are so different but complement each other," said Waterhouse. 👯 (📷: Katie Jones) #wwdeye
After designing the new @louisvuitton and @bulgariofficial flagships and a @chanelofficial boutique opening in Japan, @petermarinoarchitect has another project on his plate: The Lobster Club. Located in the Seagram Building, it’s the famed architect’s first restaurant project in New York, serving up modern Japanese brasserie-style cuisine. Bronze hues, bespoke material detailing, blush and chartreuse tones and a heavy emphasis on Picasso can be seen throughout. Mark your calendars for Nov. 1 for the much-anticipated opening. (📷: @clint_spaulding) #wwdeye