Fila Holdings Corp. is scaling back its US operations after years of financial struggles in the competitive North American sportswear market. The South Korean company shuttered key operations of Fila USA on Monday, cutting off a unit that contributed 6.5% of the group’s total revenue last year.
The US division’s performance has been deteriorating, with operating losses more than doubling to 142 billion won ($102.4 million) in 2023 from 66 billion won in 2022, according to SK Securities Co. The mounting losses dragged down the group’s overall performance, with operating profit falling 30.2% to 303.5 billion won in 2023.
A Fila Holdings representative indicated the company plans to restructure its sales channels before attempting to re-enter the US market. The strategic retreat highlights the challenges faced by international sportswear brands competing against industry giants like Nike and Adidas in the American market.
The South Korean company, which acquired the Italian-founded Fila brand in 2003, maintains a stronger position through its golf equipment subsidiary Acushnet Holdings Corp. The maker of Titleist and FootJoy brands generated 3.1 trillion won in sales last year, accounting for 77% of Fila Holdings’ revenue.
