Last week marked the one-year anniversary of the closing of the Fila acquisition by Sport Brands International LLC, an affiliate of Cerberus Capital Partners, LP. But the company looks very different today that it did just six months ago after a round of significant changes that are meant to signal the Fila brands return to its roots.
The industry was quite surprised when Jon Epstein, CEO of the newly formed SBI and architect of the Fila acquisition, abruptly resigned at the end of last year presumably as a result of his involvement in the Just for Feet fraud case. Cerberus tapped former adidas CEO Steve Wynne in January to take the reins of the organization and plot a new course for the brands under the SBI umbrella.
Wynne brought with him Robert Erb, his former adidas colleague who was EVP of Global Marketing at TaylorMade-adidas Golf and President of the adidas Golf Division.
In changes made in the last thirty days, long-time Epstein right-hand and CEO of the Fila USA group, Tom ORiordin, left the company and was joined recently by the exit of Scott Carey, VP of Footwear Sales, and Dan Russell, Director of Key Accounts.
Wynne and Erb have reached back into the TM-aG pool once again, tapping Paul Clark, the former GM for adidas Golf, to act as Managing Director of Fila USA. Clark said he has spent the last 11 years in the golf business at TM-aG and Reebok after six years with Reebok on the athletic footwear end of the business. Clark has tapped the Reebok well, bringing in Ken Cieplik, that brands former U.S. Field and Team Sales chief, as VP Footwear Sales for Fila USA. Brett Joyce is now Director of Marketing for Fila USA, coming over from TM-aG where he was Director of Global Footwear. Jeff Smith, Reeboks former sales director for the Mid-Market channel, will now head up sales for those accounts in the Midwest.
SBI has also started to strengthen global product and marketing group based in New York, pulling Kristin Kohler from Converse to head up non-Performance footwear for Fila while Mikal Peveto focuses on the performance categories.
Jim Reilly has just joined the team as VP for Global Apparel. Reilly has been on the consultant track for a while after being credited with helping revive the adidas apparel line in the early 90s. He also helped launch the Greg Norman Collection for Reebok.
In an exclusive interview with Sports Executive Weekly, the new Fila USA chief said that SBI brought all worldwide Fila employees and reps in last week for a global launch meeting to strees the importance of the companys new “Il Lusso Nello Sport” positioning, or “The Luxury of Sport”. Clark said that Fila is an Italian sport brand and they intend to focus their efforts on better, more elegant product and a renewed focus on the performance end of the business.
Filas new positioning is expected to reflect its “Performance Luxury” heritage, according to Clark. He said the U.S. strategy will be driven by four key points:
First, a renewed emphasis on Better Product will be implemented to raise the bar for the brand. Second, Fila USA will look for more Strategic Distribution as they build a refined channel strategy. Clark said the third key piece will be having the Preeminent Customer Service team in the business and last, but not least, a focus on very Good People to execute the plan.
The new strategy will mean a stronger focus for Fila in its Tennis roots as well as Running and Fitness, including the Yoga and Walking categories. There was some hint that not all categories will make the cut as the brand refines what it wants to mean to the market.
“We were trying to be all things to all people,” said Clark. “Some things we should be in because of who we are, the others may not make sense,” he said. “We lost touch with specialty retail and athletic specialty.” The Cleated category was one area where Fila may want to take a look for cuts, especially in Soccer, a category the former team heralded as a key area for the brand. Clark has a sharply different view, questioning the validity of going after a category where “four or five guys are fighting over 10% of the market”.
Apparel will still play a key part in the new strategy, according to Clark. He said the business is “about 50/50” now and will feature more “Made in Italy” product, utilizing Italian knits and other fabrications. Others in the company expect that apparel will need to lead the way to build more credibility at the top of the brand pyramid as the company attempts to maintain its volume position in the broader market in footwear.
Clark said they have seen a lot of success in the urban market as well and feel they can “still compete there very well”. But said the brand had “sort of lost its way” as it focused too much on the urban and metro business.
The new “Performance Luxury” strategy is expected to re-kindle some of the same energy for the brand that first made it a strong player in the urban markets in the 80s. The feeling here is that creating great aspirational product will build brand cache for the high fashion urban consumer.
After all, it was the Italian luxury sport brand cache that first attracted the urban consumer to the brand in the first place. Fila has been able to hold on to that cache while other brands “chosen” by the urban consumer in the 80s fell from favor quickly. Brands like Lotto and Ellesse have not been able to re-kindle that old energy, while Diadora has been able to capture some of that old magic through its upscale urban “metro” positioning while maintaining its performance Soccer cache.
>>> The trick here is taking a step back and still be able to take the two or three steps forward. Management will need to walk a fine line in re-building a brand while maintaining volume. Not an easy task…