Fila ready to expand in Europe, targets €620 million revenue by 2020
Italian sports label Fila is riding the 1990s trend taking over streetwear, as shown by its Black line, featuring an oversize Fila logo on tee-shirts, track-suit bottoms and fleece sweatshirts. This strong branding element is driving the lifestyle segment for the label, which was relaunched in 2011.
"It is a buoyant trend, though we are well aware that it could stop quite abruptly," said Christoph Schachtner, in charge of Fila's development for Dosenbach-Ochsner, the label's master licensee for continental Europe.
"Our intention is to expand Fila’s range and position the brand for long-term growth, focusing on its roots."
Fila's objective is to achieve a 10% yearly growth rate until 2020. According to Christoph Schachtner, in 2016 the label's revenue is expected to reach €430 million, while only five years ago the label was experiencing severe difficulties.
In 2011 Fila Korea, owner of the brand since 2007, chose the Swiss subsidiary of the German distribution giant as its partner for continental Europe, and Fila's business strategy was completely overhauled.
"The former licensee used to distribute the brand through low-quality retailers," Schachtner explained.
"We decided to cease trading with the majority of [them].”
Now Dosenbach-Ochsner is distributing Fila via German chain Deichmann, and has recently assigned the apparel and footwear licence to Medico Sports Fashion. The latter also sources materials (through a joint-venture in Dhaka, Bangladesh), creates the collections and works on the European distribution network.
Fila plans to develop a tech range to stake its claim in the sports segment, leveraging its prestigious past. The label used to outfit former tennis champions such as Borg, Becker and Seles, and has logically started with a tennis tech line, worn by top contemporary professionals such as Karolina Pliskova, Marin Cilic and John Isner. To bolster the sport segment, it has also added a fitness line for men and women, and is set to launch a running range on the European market in 2018.
At the same time, Fila has developed a fashion range, with the Black and Heritage lines. The first features basic items decorated with the Fila logo, while the second has delved into the label's archives. Fila's revenue and distribution network are reportedly equally split between the sport and lifestyle segments, with 1,200 multi-brand clients, including directional stores and online fashion retailers, and 3,000 Deichmann stores.
"Our strategy is to establish a presence in multi-brand stores. We have now applied it to five markets: Italy, France, Scandinavia, Germany and Greece."
Meanwhile, Medico is ready to expand into other markets: it has started trading in Spain, opened a commercial office in Turkey, and is making inroads into Balkan countries, in the Czech Republic and in Slovakia. Another of the brand's growth vectors will be its web presence, seeing as the Fila website for EU markets is available only in German.
Through a combination of geographical expansion and the broadening of its product range, Fila could well be worth over €620 million in continental Europe by 2020, when the current master licence contract is due to expire. However, Dosenbach-Ochsner will have priority on the licence renewal.
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