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Fila's Full Court Press To Snare Suburbia


The Corporation

FILA'S FULL-COURT PRESS TO SNARE SUBURBIA

Strolling along New York's Broadway, Sadiki Nokwere steps into a shop to buy a sporty-looking Fila shirt. The 30-year-old musician had already purchased two pairs of Fila pants elsewhere that day. "I like the design and the feel," he says. "I buy it to be unique."

If Nokwere really wants to be unique, he may have to find another brand. Last year, Fila rocketed from seventh to third place in the U.S. athletic-shoe market. Its clothes are huge in the inner city. And with new apparel and shoe lines on the way, Fila Holding--based in Biella, Italy--now wants to clothe older suburbanites, too. "Only companies that are able to break out of their urban niche can survive," says 61-year-old Enrico Frachey, Fila's chief executive.

It's a risky bet: Despite its history as a maker of preppy tennis togs and skiwear, the 70-year-old Fila's resurgence stems from the appeal of its boldly designed sneakers and casual wear to city teens. Fila's comeback began when Frachey, its former No.2, returned to the money-losing company as CEO in 1987. By 1993, after Frachey had set up U.S.-based management, hired hip designers, and begun signing stars, Fila went public. But it wasn't until last March that Fila struck gold with its Grant Hill shoe, named for the 1995 NBA rookie of the year. The basketball shoe brought in roughly 20% of U.S. sales, catapulting Fila past such rivals as Adidas.

U.S. sales have jumped from $84 million in 1991 to roughly $500 million last year--57% of Fila's estimated total sales of $879 million. Analysts expect 1995 profits to rise 40%, to $60 million. That has sent Fila's American depositary receipts soaring 148% in the past year, to around 50. "Fila is the strongest up-and-coming brand in the industry," says analyst Kevin Tempestini of Salomon Brothers International in London.

To keep up momentum, Fila's new U.S. footwear head, Robert Liewald--the ex-corporate merchandiser for Foot Locker and Woolworth Corp.'s other athletic-shoe divisions--is putting on a full-court press: A new Grant Hill shoe came out in November, and a summer campaign will tie his Olympic appearance to another shoe. Other endorsers include star rookie Jerry Stackhouse of the Philadelphia 76ers--who has a five-year, $15 million deal--Randy Stoklos, of beach volleyball fame, and marathoner German Silva.

BOOMER BOUND? But the biggest challenge will be broadening beyond Fila's niche. Frachey knows that its faddish popularity could quickly disappear. So he wants to boost non-shoe sales in the U.S., now roughly 23% of revenues here. With a men's clothing line, Fila Sport, skiwear, and outdoor gear, Frachey is aiming for an older, wealthier market.

Will Fila's hip, street-smart appeal catch on among aging suburban baby-boomers? "The Fila label is so heavily associated with the inner city that suburban types might not relate to it," says Robert E. Carr, editor of the New York-based Inside Sporting Goods newsletter. Indeed, the risk of being all things to all people is that neither Sadiki Nokwere nor his suburban counterparts may feel unique with Fila.BY SILVIA SANSONI IN BIELLA, ITALY, AND LORI BONGIORNO IN NEW YORK


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