Fila to keep the tennis ball in its court

U.S. Open sponsor designing new gear

July 18, 2000|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

Hoping to clearly link the Fila brand with tennis in consumers' minds, Fila USA will sponsor the U.S. Open Tennis Championships through 2001 and launch a collection of U.S. Open tennis shoes and apparel in stores next summer.

The U.S. division of the Italian athletic footwear company has renewed an agreement with the United States Tennis Association to continue as footwear and apparel sponsor, the Sparks-based division said yesterday. Fila will design and make uniforms for the tournament's ball persons, linesmen, umpires and staff and sell replica uniforms and event souvenirs both on- and off-site.

It is Fila's first multiyear agreement with the USTA and the first to include a separate licensing arrangement in which the footwear and apparel designer will create and sell a collection through sporting goods stores, department stores and specialty boutiques. Fila USA is designing the products - such as polo shirts, tennis shorts, warm-up suits and fleece pullovers - with Fila's Italian design group, and hopes to sell the line through Fila divisions worldwide.

Sponsorship of the U.S. Open, which starts its two-week run in New York on Aug. 28, and the licensed sales should help Fila raise its U.S. profile as it attempts to regain market share by focusing on its tennis heritage, analysts said. The company, which lost $3.5 million in its most recent quarter, which ended March 31, and has struggled against the likes of Nike Inc. and Adidas, said it is beginning to rebuild relationships with retailers.

Fila will likely invest at least $2 million over two years in sponsorship fees and royalties on sales of the co-branded merchandise, sources said.

In June 1999, Fila's parent company, Fila Holding SpA, took a step to refocus on its tennis roots, securing exclusive rights to sponsor the Association of Tennis Professionals Tennis Masters Series for three years and create ATP-branded footwear and apparel. The ATP and Open sponsorships give Fila a significant presence at 11 of the world's top tennis events, said Howe Burch, a Fila USA spokesman.

"Clearly, it's about our re-establishing ourselves in tennis, and aligning ourselves with assets we can leverage in a meaningful way," Burch said.

That type of marketing represents a shift from the past, said Flavio Cereda, director of equity research for Lazard Freres & Co. in London.

"It is the right thing to do," Cereda said. "If you want to be in the game, you have to play.

"In the past, they went through a period where they were sponsoring everything, including baseball. They have recently tried to focus efforts in areas where they want to be seriously involved. In those areas they've targeted to enhance the brand and be back on the shelf, they are keen to maintain a presence."

When the company reported its first-quarter results in May, which showed losses narrowing and sales gains of 8 percent worldwide and 1 percent in the United States, Fila Holding's chief executive, Michele Scannavini, noted that advance orders were up in all geographic areas and that the Fila brand was beginning to regain interest of both the trade and consumers in the United States after many difficult seasons.

Now, "in terms of tennis, we're showing significant increases versus a year ago, and a lot of that has to do with re-establishing our presence through these events," Burch said. "We've raised the brand profile in a significant way in a category where we have a lot of heritage and credibility."

Raising the profile has helped Fila get back on the shelves, or at least expand the offerings, in more retail stores, Burch said. About a year ago, for instance, Fila products were nearly nonexistent in the Sports Authority, the nation's largest sporting goods retailer.

"The Fila apparel line had gone the way of more fashion than function, and the fashion piece of the Fila business, for us, wasn't working," said Michael McGuinn, vice president for merchandising for the Sports Authority. "It was a matter of sitting down and saying, `You will not make it with us unless you define what your niche is.' Fila has taken the challenge and focused its line." Now, he said, Fila tennis products are a growing area for the chain.

"They really are coming on strong and being recognized at retail by customers in being a leader in tennis footwear and apparel," McGuinn said. The Sports Authority is planning to staff Fila's on-site store at the U.S. Open.

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