Lotto May Try To Buy Fila
By Richard Pagliaro - Fila — the brand of tennis clothes made popular by Bjorn Borg in the 1970s and currently worn by Jennifer Capriati, Jelena Dokic and Mark Philippoussis — may be acquired by the Italian sportswear group Lotto. According to a published report in the Italian financial daily MF, Lotto is leading a group interested in purchasing Fila.
The Italian sportswear company is currently controlled by HDP, a fashion and publishing group. In June, HDP hired a pair of Italian banks to help it sell its 54.6 percent stake in Fila. According to one published report, HDP stockholders are pressuring the company to withdraw from the financially-draining fashion business and focus on its profitable media businesses.
Fila, which was the official sportswear of the 2001 U.S. Open, launched its first U.S. Open line of apparel and footwear in July.
In an effort to bounce back from basketball-related losses, Fila has been focusing on tennis to turn its fortunes around.
The Italian sportswear company — once the brand of choice for many tennis pros — turned to basketball in the mid 1990s and after an initial rise in sales to a peak of $700 million in 1997, it suffered a dramatic decline, losing $68.9 million last year. At the opening of the new Fila megastore in Milan in May, the company's CEO, Michele Scannavini, announced Fila will return to its roots as a tennis brand.
"The brand took off in the mid 1990s because it was tied to basketball and hip hop music — it was seen as aspirational because the product was only found at golf courses and places like that," Scannavini said in a May press conference. "Then we went into decline because the brand became too popular. It was everywhere. So what we're trying to do now is go back to our 1970s roots as a tennis brand and refocus the the brand as something vintage, something Italian."
Admitting the re-launch will "take a lot of time and a lot of investment," Scannavini said he planned for the company to produce a profit within two years. In the first quarter of this year, Fila reported a $19.1 million loss compared with a $3.5 million loss for the first quarter of 2000. The company attributes the increased losses to restructuring costs.
Fila did not meet its goal of breaking even for 2001, which may have prompted the decision to seek a buyer.