Fila Taps Into Heritage Styles

Fila is looking back to move forward.

In a bid to grab some market share, the athletic brand, owned by South Korea-based Fila Korea Ltd., is focusing on its heritage product and lifestyle segment.

“Sneakers are hitting their stride again, and we’re reinvesting and making all the right types of moves to capitalize on the trend,” said Jon Epstein, president and CEO of Fila USA. “There was a time when we were selling millions of shoes in this category, and we will do it again.”

During Fila’s heyday in the 1990s, the exec estimated that lifestyle product represented a $500 million business for the company. Fila USA’s current market share in the category is less than 1 percent, or about $10 million, according to SportsOneSource’s Matt Powell.

He noted that management changes and financial instability in the past decade contributed to the brand’s fall from grace in the U.S. Powell added that another challenge to the brand was the boom in innovation in the athletic market.

“Technology isn’t really Fila’s hallmark, and it was very difficult to find their voice in a market that was technology driven,” Powell said. “I’m expecting a resurgence in casual nontechnical footwear, and Fila can play it very well there.”

Now, the brand is looking to bring back that magic by reintroducing some of its popular ’90s styles at key independent retailers.

“What’s old is new again, and it’s a good opportunity for us to take advantage of this kind of product,” Epstein said. “We’ve got all this heritage, so now we’re trying to re-create that aura so we can attract the right mix of retailers.”

And Fila is taking a cerebral approach to building buzz. For spring ’13, the company will limit distribution of its heritage product to trendy sneaker shops in target markets, such as Packer Shoes in Teaneck, N.J., Detroit’s Burn Rubber and Bait in Los Angeles.

Mike Packer, owner of Packer Shoes, said Fila has potential with its retro products, as long as the brand takes its time re-establishing the shoes at retail. The shop owner, who’s collaborating with the label on a special makeup of the FX-100 style for later this year, is optimistic that partnering with the brand will turn into meaningful business.

“You can’t invent heritage,” Packer said. “They have a whole treasure trove of products from the 1980s and ’90s, and the price points and the quality for the consumer is there.”

Fila also began consulting with 12 of its most important lifestyle retail partners on how to effectively shape the category moving forward.  In addition to Packer, the brand has collaborations lined up with Concepts in Cambridge, Mass., and Bait.

Epstein predicted the brand-building moves will eventually lead to higher volume with retail chains down the road. “We ultimately want a big business in the mall, but to get there we need to be patient,” the CEO said. “Luckily, we have a base business that’s recurring every month and throwing up enough dollars for us to invest and bring these big stories back.”

Driven by success with kids’ product at family retail chains like Kohl’s and Famous Footwear, Fila’s overall business is up 30 percent over last year, according to Epstein. The company is now looking to allocate more resources to marketing and support of its retail partners. “When the opportunities arise, we want to spend the money,” he said. “But we want to spend it wisely on things that create the right aura for the brand.”

Declining to reveal exact figures, the executive said Fila upped its marketing budget by millions — the most it has spent since 2007.

Later this year, the company will debut POS fixtures at retail, with LCD screens that describe products and connect to mobile phones. Unique packaging that calls out Fila’s heritage styles and proprietary technologies, such as Coolmax and Memory Foam, will also be rolled out. “Rather than just doing the typical advertising, we’re investing in these environments with our retail partners to create a better experience,” Epstein said. “We’re not selling anywhere that you don’t see Nike or Adidas, so when we’re in the store, we need to stand out.”

Fila also is spending more time on grassroots initiatives, with sponsored events, product placement and bloggers that help woo a younger consumer who may not be familiar with the brand’s sportswear roots.

The firm also has archival images of athletes and hip-hop stars from the 1990s, such as Tupac Shakur, that it will use in upcoming campaigns. New spokespeople will also be brought into the fold, and the brand is evaluating endorsement partnerships with NBA athletes and musicians.

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