Footwear retailer, Metro Brands said that the company has earmarked the second half of FY2024 to clean up the legacy inventory of one of its newly acquired brands- FILA, as part of a larger plan to recreate the success of the brand seen in markets like China.
The company said that this was an important step in building the brand image as it believed the existing inventory did not serve the taste of the brand image.
“..we don't believe that inventory is in line or reflects where we want to take the brand in the coming year,” said the Metro Brands management during an investor meeting.
Metro Brands, which holds rights to brands such as Crocs, Fitflop, Birkenstock, and Cheemo, acquired the India rights of the Italian brand FILA in October 2022.
The company had, at the time, chalked up a three-year plan for the brand.
This year, the company plans to focus on getting rid of excess inventory, freeing up cash and reevaluating sales channels.
“And the advantage of [inventory liquidation] is twofold,” said Metro Brands’ management in their quarterly interaction with investors after detailing their July-September results.
“One is we're able to increase our inventory utilization by getting products across the country, and [the second is] reducing our time to delivery,” said the company.
Reimagining FILA
In the next financial year, Metro Brands plans to reset the FILA brand and “position it for success”. Under Cravetex, FILA was not particularly focused, and offered shoes priced all the way from sub-1,000-rupees to above Rs 4,000, something that Metro Brands is keen on changing.
The Italian sportswear brand was founded in 1911 in Biella, Piedmont by the Fila brothers. Originally known as Maglificio Biellese, the company produced clothing and underwear. In the 1970s, Fila began manufacturing sportswear, gaining popularity for its designs worn by tennis players like Bjorn Borg.
Today, Fila is known for its iconic styles inspired by vintage sports uniforms and uses bold colors like red, white and blue in its clothing. In recent years, Fila has experienced a resurgence in popularity, appealing to Gen Z consumers looking for retro inspired fashions.
Metro Brands management said that it plans to play out the same strategy as was implemented in China.
In the Chinese market, FILA was positioned as a brand different from other typical athletic brands. The strategy was so successful that FILA in China has a turnover of roughly $4 billion, said Metro Brands officials.
“And we see that consumer in India that is quite savvy going and migrating towards it as well. So that's how we want to position the brand,” they noted.
While the brand repositioning is expected to be complete next financial year, the year after will see Metro Brands really invest behind the FILA brand by opening new stores, and expanding and repositioning existing ones.