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| FILA products are displayed at an outlet. The fashion company is committed to revamping its products design and identity for a rebound. / Courtesy of FILA |
Sportswear maker overhauls portfolio to bolster profitability
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Yoon Yoon-soo, |
Fashion house FILA has taken a bold step to put the brakes on declining sales and capture the momentum for a rebound.
The Seoul-based company recently announced that it had shut its business unit for outdoor shoes and apparel, which contributed nearly 6 percent of sales or 23.8 billion won ($19.93 million).
The decision came shortly after FILA Chairman Yoon Yoon-soo unveiled the company's vision for 2020 on Sept. 11, under which it aims at doubling sales and the satisfaction of customers and employees by 2020.
FILA's domestic sales plunged to 397.4 billion won last year, down from 423.8 billion won in 2012. It reported its worst quarterly global profit in six years during the September-December period last year ― 14.6 billion won in operating profit, compared with 9 billion won in the third quarter of 2009.
"We will surprise customers with completely new products and innovative designs early next year. The closure (of the outdoor products unit) was one of the steps toward the new FILA," a FILA spokesman said.
He refused to give detailed information about its renovation. Instead, he said, the company will hold a showcase in late October, during which its visualized new design concept and identity will be unveiled.
"We are working with ‘stylish performance' as a new identity and design concept," the spokesman said. "Our new products will be suitable for light and casual sports such as running, fitness and yoga, rather than tough and extreme sports."
He said the company will use a wide range of colors to make its products trendy and fashionable, making a departure from its traditional color policy focusing on white, indigo blue and red.
"Our products next year will be completely new and distinguished from our past products," he noted.
Regarding the closure of the outdoor unit, he said it had been done to concentrate its personnel and financial resources on the renovation project, adding there would be no additional closure or downsizing of existing businesses.
Industry insiders said FILA Chairman Yoon has a strong commitment to changing the company. In June, he pledged an overhaul of the company, appointing Kim Jin-myun, a veteran fashion businessman from Cheil Industries, a fashion affiliate of the Samsung Group, as FILA's chief executive officer.
Yoon also hired Jung Goo-ho and other fashion designers to reshape the firm's design strategies and product identity. He also employed top actor Kim Soo-hyun as a promotional model to attract customers in Korea and in other Asian markets.
It remains to be seen how much these endeavors will work to save the troubled fashion house.
Amid intensifying competition, Nike, Adidas and other sports brands are going all-out to consolidate their market position.
"In this climate, it won't be easy for FILA to crack the market and show outstanding performance," a fashion expert said.
