SINGAPORE: They’re the chunky, thick-soled throwbacks to the 1990s known as "dad shoes.” And they’re beloved by millennials, whose fascination with retro footwear has brought Fila back from the dead.
They’ve also helped Yoon Yoon-soo amass an unlikely fortune. Gene, as he’s known in English, is estimated to be worth about $830 million through his stake in Fila Korea Ltd., which acquired the global Fila brand in 2007 in what South Korean media called a shrimp swallowing a whale. Yoon went on to oversee a revival in Fila’s fortunes, sending shares of his company surging.
Central to Fila’s comeback was its move to bring back iconic products from the ’90s, targeting shoppers craving classic looks. Its "Disruptor 2” sneakers, for example, reintroduced in 2017, were among the most popular women’s shoes at one point last year, according to global fashion search platform Lyst. Fila estimates that more than 10 million pairs were sold as of January.
Yoon, 73, declined to comment for this story. He told a local newspaper in South Korea in 2017 that Fila is more than just a sports brand to him. "It’s more like a baby I had at the late age of 45,” he said.
Fila has also been helped by celebrities wearing its products -- U.S. model Kendall Jenner and singer Rihanna have both been seen in clothing bearing Fila’s iconic red, white and blue logo -- and by its relatively low pricing.
"Fila changed its target from people in their 30s and 40s to younger customers while cutting prices,” said Na Eun-chae, an analyst at Seoul-based brokerage Korea Investment & Securities Co. "That worked well, along with its focus on the shoe segment.”
Fila Korea shares have surged 400% since the start of last year, boosting its market value to $4.3 billion. Yoon and his family own about 20% of the company.
Yoon, a late bloomer who graduated from college in his 30s, started at Fila in 1991 as head of the company’s South Korea business, earning an annual salary of $1.5 million. But he had his sights set on bigger things. In January 2007, he spearheaded a $400 million leveraged buyout of the global Fila brand and all its subsidiaries. In 2010, he took the company public in South Korea.
Originally started in Italy in 1911, Fila had been sold to U.S. private equity firm Cerberus Capital Management in 2003. Its heyday ended in the 2000s when it suffered from declining sales and management made excessive investments.
Another key part of Yoon’s strategy was building a majority stake, starting in 2011, in the company now called Acushnet Holdings Corp., the maker of Titleist golf balls. Acushnet listed its shares in New York in 2016. Fila Korea reported revenue of 3 trillion won ($2.6 billion) in 2018, 61% of which came from Acushnet, according to Fila Korea.
"Wealth accumulation that’s not morally justified has no meaning,” Yoon Yoon-soo once told South Korean newspaper Chosun Ilbo. "We need to look back on how we made our fortunes.” - Bloomberg pic
Fila’s footwear and apparel sales, excluding Acushnet, saw a 52% increase to 1.2 trillion won in 2018 from the year before, the company said in a presentation.
Yoon never envisioned a career in dad shoes and golf balls. His mother died of typhoid shortly after his birth. He lost his father to cancer in high school and wanted to become a doctor, but failed three times to get into medical school. He ended up studying and graduating in political science and diplomacy.
His age made him an unappealing candidate for entry-level jobs at most companies. After many attempts, Yoon landed at J.C. Penney Co., buying Korean products to sell in the U.S.
Later, he came across Fila in the U.S. and persuaded the firm to manufacture shoes in South Korea. After that, Yoon was asked to set up and lead the company’s Korean business, which he later bought out before acquiring the global brand.
Fila now operates in more than 70 countries. The brand is seeing rapid growth in markets such as China, where Fila Korea has a 15% stake in a joint venture with Anta Sports Products Ltd.
Yoon, who once said he’d like his epitaph to be that he "worked hard,” is unlikely to be judging his success by his net worth alone.
"Wealth accumulation that’s not morally justified has no meaning,” he once told South Korean newspaper Chosun Ilbo. "We need to look back on how we made our fortunes.” - Bloomberg