"It Sold Well Because It Was Cheap, But..." The Downside of 'Value-for-Money': Eldest Son Removes Fila Sign After 100 Years [Second-Generation Management Begins] ⑤

U.S. Wholesale Strategy Fails... Fila Brand Taken Down
'Titleist' Dependency Grows
Family Company 'Piemonte' Increases Stake... Geunchang Yoon's Succession Progresses Smoothly

He boldly removed the "Fila" signboard from the global sports brand built by his father. Although Fila made a spectacular comeback as a "value-for-money brand," low-priced sales eventually boomeranged, leading to a decline in brand image. Geunchang Yoon, CEO of Misto Holdings (formerly Fila Holdings) and the eldest son of Yoon Yoonsoo, who first introduced Fila to Korea, is now seeking a breakthrough in the global market by changing the company name to Misto Holdings in an effort to recover Fila's shrinking performance.

According to the Financial Supervisory Service's electronic disclosure system on May 29, Misto Holdings' consolidated sales from the Misto division fell below 1 trillion won last year, recording 917 billion won. Operating profit remained in the red at minus 40 billion won. This sluggish performance continued into the first quarter of this year. First-quarter sales fell 11% year-on-year to 215.7 billion won, while operating profit plunged 62% to 2.3 billion won.

Geunchang Yoon, CEO of Fila Holdings.

U.S. Wholesale Strategy Fails... Fila Brand Taken Down

The Misto division generates revenue from the sports brand Fila (in Korea, the U.S., and commission-based businesses), domestic indie brand licensing, and distribution operations. Fila's sales in Korea suffered due to the downturn in the fashion industry, and performance in the U.S. shrank significantly following business restructuring.

After COVID-19, Fila accumulated a large amount of unsold inventory, with the U.S. subsidiary's inventory burden in particular weighing heavily on results. The U.S. subsidiary's sales, which stood at 569 billion won in 2021, were halved to 287.7 billion won in 2023 and 265.8 billion won in 2024. After posting an operating loss of 68.2 billion won in 2022, the deficit widened to 107.2 billion won last year. As a result, Fila suspended its U.S. operations in November last year as part of restructuring efforts.

Fila, a brand that originated in Italy in 1911, was first introduced to Korea when Chairman Yoon established Fila Korea in 1991. In 2007, Chairman Yoon went on to acquire Fila's global headquarters?the first case of a Korean subsidiary acquiring a global parent company. CEO Yoon joined Fila USA in 2007 for management training. In particular, he led the rebranding efforts after joining Fila Korea in 2015.

He reinterpreted and relaunched once-popular shoes such as the "Deluxe" and "Disruptor," sparking a retro trend, and collaborated with luxury brand Fendi as well as famous domestic BJs, capturing the attention of younger consumers. In the U.S., the "Disruptor" was named Shoe of the Year, signaling Fila's resurgence.

CEO Yoon also pursued a wholesale strategy in both the U.S. and Korea, rapidly expanding the company's scale by diversifying sales channels. However, when the COVID-19 pandemic began in 2020, this strategy backfired. The closure of offline stores led to a buildup of unsold inventory, and selling excess stock at discount retailers like Costco inevitably damaged Fila's image, branding it as a "low-priced brand." In response, CEO Yoon introduced a "Fila 5-Year Strategy" in 2022 to redefine brand value by reducing the proportion of wholesale sales in Korea and the U.S., but the plan fell short. At that time, wholesale sales accounted for 90% of Fila's U.S. revenue and about 35% in Korea.

In the first quarter of this year, the Misto division's product sales accounted for only 16% of Misto Holdings' total sales. As of the fourth quarter of last year, the product sales ratio was about 20%, but it dropped by 4 percentage points in just one quarter. Compared to the first quarter of last year, the sales ratio declined by 3 percentage points. Although the golf business division, Acushnet, saw improved performance, the sharp decline in the Misto division's results led to a reduced share of overall sales.

'Titleist' Dependency Grows

Ultimately, CEO Yoon abandoned the family legacy "Fila" from the company name and turned to licensing in the Greater China region and global distribution. Since last year, Misto Holdings has been introducing domestic indie brands in the Greater China market. Misto Holdings established Misto Brand Holdings in Hong Kong and, through its subsidiary Mantova Brand Management, distributes brands such as Martine Kim and Marithe. Through "Misto Brand Management," it also secured licenses for brands like Rave, Mardi, and Rest & Recreation. In the first quarter of this year alone, more than 50 offline stores reportedly opened.

A Misto Holdings representative stated, "We have not withdrawn from the U.S. market, and we are reviewing strategic measures to integrate consumer perceptions and experiences for each Fila product category, moving away from a low-priced, product-focused approach. In the Greater China region, we plan to expand our portfolio from women's casual wear to sports and outdoor brands, growing our licensing and distribution business."

CEO Yoon also launched a premium line, "Fila Plus," last October, appointing Lev Tanju, founder of the Gen Z-favorite skatewear brand Palace, as creative director to pursue an upscale strategy for Fila. However, as this is still in its early stages, its contribution to revenue remains minimal.

Due to Fila's poor performance, Misto Holdings has become increasingly dependent on Acushnet. Acushnet, best known for its leading golf ball and equipment brands Titleist and FootJoy, was acquired by Chairman Yoon in 2011. Currently, Titleist accounts for 60% of Misto Holdings' total sales. In 2022, Titleist's sales share did not exceed 50%, but in just two years, its influence has grown to dominate the group. As of last year, Titleist's golf equipment sales reached $1.508 billion (2.075 trillion won), up about 7% from the previous year's $1.42 billion. FootJoy, another Acushnet brand, accounts for about 21% of sales.

Acushnet is now looking to expand into Southeast Asia. Currently, Acushnet's sales are distributed as follows: the U.S. (60%), Europe, the Middle East, and Africa (13%), Korea (12%), and Japan (6%). Over the years, Acushnet has established subsidiaries in Thailand, Singapore, and Malaysia to distribute Titleist equipment and FootJoy golf shoes and gloves. In August last year, it also set up a consulting subsidiary in Vietnam for golf-related business. In January this year, FootJoy established a limited liability company, ACL FootJoy, in Singapore to source golf shoes, gloves, and apparel.

Family Company 'Piemonte' Increases Stake... Geunchang Yoon's Succession Progresses Smoothly

CEO Yoon took the helm at Misto Holdings in 2020 when Fila Korea transitioned to a holding company structure. At that time, Chairman Yoon stepped down from frontline management and now serves as chairman of both Misto Holdings and Acushnet Holdings, providing support to CEO Yoon from behind the scenes.

Efforts to transfer equity are also progressing steadily. The largest shareholder of Misto Holdings is Piemonte. Piemonte, the top-tier holding company, is 75.18% owned by Chairman Yoon and controls various affiliates through Misto Holdings. This structure involves an unlisted holding company controlling a listed intermediate holding company. Piemonte's second-largest shareholder is Careline, a manufacturer of medical electric scooters, with a 20.77% stake. However, CEO Yoon (who holds a 4.05% stake in Piemonte) owns about 60% of Careline, effectively making him Piemonte's second-largest shareholder.

Piemonte has been steadily acquiring shares in Misto Holdings. As of March 2022, Piemonte's stake was 21.63%, but through additional purchases, it increased to 35.81% (21,522,814 shares). To achieve this, it pledged Misto Holdings shares as collateral to Korea Securities Finance Corporation, Kookmin Bank, and Hana Bank.

Dividends have also been utilized. Misto Holdings paid out 95 billion won in 2022, 65.5 billion won in 2023, and about 70 billion won last year in cash dividends. During this period, Piemonte received dividends totaling 68 billion won.

Piemonte's last share purchase took place in March last year. This year, with a sharp decline in cash holdings, further share acquisitions appear to have been difficult. At the beginning of last year, Piemonte held 52.2 billion won in ordinary deposits, but by the end of the year, cash and cash equivalents had dwindled to just 7.6 billion won. This sharp drop in cash holdings was attributed to reducing borrowings from 300 billion won in 2023 to 87 billion won and repaying 125 billion won in loans.

Industry observers expect Chairman Yoon to transfer his stake in Piemonte to his eldest son or to merge Misto Holdings and Piemonte as a means of succession. To this end, Misto Holdings is expected to maintain its high-dividend policy. Recently, as part of its efforts to enhance shareholder returns, Misto Holdings announced plans to allocate up to 500 billion won to shareholder returns over the three years from 2025 to 2027. It also plans to increase the shareholder return ratio to as much as 50% of consolidated controlling shareholder net income.