After roughly three and a half years of ownership, Sport Brands International Ltd. (SBI) has entered into a definitive agreement to sell the Fila brand to its Korean licensee, Fila Korea, headed by Mr. Yoon-Soo (Gene) Yoon. While the purchase price was undisclosed, sources close to the deal estimate it to be worth roughly $350 million to $375 million. SBI originally bought the Fila brand for $351 million in 2003.
The sale is structured as a sale of SBIs subsidiary, Fila Luxembourg, which holds the rights to the worldwide use of the brands and trademarks of FILA. Since acquiring the brand, SBI has been working at cleaning up its distribution and getting its product out of discount and off-price retailers.
Yoon, the chairman of Fila Korea, was originally the CEO of Fila Asia when SBI bought the brand. In 2005, he completed a successful management buyout of Fila Korea. In a prepared statement, he said, “We are very excited to acquire the world-wide Fila business. Fila is widely recognized as one of the premier global sports brands and we believe it has tremendous untapped potential. We look forward to working closely with Filas talented management team and regard the existing employees as a valuable asset of the business.”
In a 2005 interview, SBI CEO Steve Wynn said that the underlying mission of SBI was to “build a portfolio of sports brands that interact with the market in different categories at different demographics for different purposes.” To do this, SBI acquired not only Fila, but also Cloudveil and Motionwear. In a prepared statement, the company said that it would be keeping both of these brands following the sale of Fila. However, Mr. Wynn has also been quoted saying that they are looking at other possibilities as well.
Recently, Cloudveil announced that it is seeing a very strong sell-in season, with an 18% increase in the number of outdoor/ski specialty storefronts and an average order increase of 45% boosting Cloudveils 2006 revenue 87% over 2005. In addition, Cloudveils launch into the fly fishing market added over 150 new storefronts and more than doubled the companys spring/summer revenue.
>>> The talk on the street has former CEO Jon Epstein taking over responsibility for national sales in the U.S. on an outsourced basis and fielding his own team to cover that business. As a partner in the SBI deal, could this signal his return to manage the U.S.?
>>> Rumors about SBI selling off brands have been circulating for months and this most recent move has many wondering whos next
>>> With all of the pent up demand in the outdoor deal making market, we can expect to see some strong multiples if SBI does decide to shop around for a Cloudveil buyer