1 Fila Way
Sparks, Maryland 21152-3000
Telephone: (410) 773-3000
Fax: (410) 773-3000
Web site: www.fila.com
Between 1994 and 1996 Fila USA climbed from seventh place in the athletic-footwear category to an impressive third place. Although the company made shoes and attire for a variety of sports, basketball-shoe sales proved Fila's biggest success. An endorsement deal with Detroit Pistons' player Grant Hill played a clear role in this achievement. After introducing Hill's signature shoe in 1995, Fila's basketball shoe sales shot up 52 percent in one year, putting it right behind the industry leader Nike. Image problems, however, continued to nag Fila. In the United States athletic-shoe sales were driven by both technology and style. Fila was struggling to transform its image from that of fashionable shoes to functional shoes. By 1997 Fila had still not found a solid niche among young consumers, the lifeblood for athletic-shoe sales. During the first half of the year retail orders were weaker than expected and sales were stalled, forcing Fila to do heavy discounting. Even Hill's endorsement seemed less meaningful to teens than it had been a few years earlier. A young player in a New Jersey basketball league was asked by Bloomberg News about Fila shoes. He summed up the problem: "Look around—nobody's wearing them."
Despite the waning effectiveness of Hill's endorsement, Fila renewed his contract in 1997 and created a new advertising campaign to promote the Grant Hill 4 basketball shoe. It was reported that Hill's new seven-year endorsement agreement with Fila was valued at $80 million. The campaign began in early November to tie in with the start of the National Basketball Association's new season. Four initial television spots focused on Hill's personality rather than the shoe's new high-performance technology and featured the tagline "Change the game." Subsequent print ads followed the same theme as the television spots.
The campaign failed to achieve its goal of driving sales. Based on 1997 sales, in 1998 Fila had dropped to number four in the U.S. market, behind competitors adidas, Nike, and Reebok. Further, in the first quarter of 1998 Fila's U.S. sales plummeted 52 percent. Leo Burnett USA was hired as the agency of record for Fila in July 1998 and was charged with creating a new campaign to support the launch of the Grant Hill 5 shoe.
Fila was founded in Italy in 1926 as a knitwear company and introduced its first line of athletic sportswear in 1973. During the 1980s and early 1990s Fila's U.S. footwear was produced by another company under a licensing agreement. In 1991 Fila made the strategic decision to regain direct control of its footwear line and bought back the license to make its own shoes. Over the
years Fila had positioned itself as a source for fashionable athletic footwear and apparel. The fashion niche had helped distinguish Fila from its more technically oriented competitors, but it marred Fila's image as a maker of functional shoes.
In 1993 Fila began remedying its lackluster sports image by signing a number of marquee athletes to endorse the shoes. In the basketball market the roster included players Jerry Stackhouse, Jamal Mashburn, and Hersey Hawkins. Bringing Detroit Pistons basketball player Grant Hill into the fold in 1994 helped the company climb from seventh place in the athletic-footwear category to third. Fila senior vice president of advertising and communications Howe Burch credited Hill's alliance with taking the company to a new level. He told the Washington Post that Hill "bridged the two markets for us, urban and suburban." Hill's endorsement meant a lot to footwear buyers for sporting-good stores as well as to the kids who bought the shoes. A buyer for City Sports in North Reading, Massachusetts, told Footwear News that he considered Hill's selling power second only to Chicago Bulls' basketball great Michael Jordan.
The endorsement strategy worked well initially. In the athletic-shoe category Fila moved into the number three slot, behind Nike and Reebok. For basketball shoes the company's sales were second only to Nike. The original Grant Hill basketball shoes, introduced...