Italian sportswear and athletic shoe firm Fila Holding SpA on Tuesday posted a fourth quarter net loss of $16.6 million versus a year-ago loss of $46.7m and said it swung to an operating profit during the quarter.

The Biella-based company said for the full year its net loss was $76.4m versus $125.2m in 2001 with net direct sales falling seven per cent year-on-year to 874.7 million euros from 945 million euros.

Net direct sales for the quarter plunged 20 per cent to 171.1 million euros from 215.6 million euros with apparel sales down 12 per cent at 113.8 million euros and footwear sales down by a third at 57.9 million euros.

Fila said quarterly sales in the US fell 17 per cent to 61.4 million euros from 74.4 million euros in 2001, while sales in Europe plunged 19 per cent year-on-year to 55.4 million euros and sales in the rest of the world slumped 25 per cent due a 72 per cent sales plunge in Latin America and the Far East.

The firm said its 2002 results were hit by the "discontinuation of the Australian and Brazilian subsidiaries in favour of a licensing strategy in those countries, the strong appreciation of the Euro against the US Dollar during the second half, the restructuring process in the UK with considerable write-down of assets and the impact of exchange rate changes for Argentina and Brazil".

Operating profit for the quarter was 4.7 million euros, compared to an operating loss of 25.5 million euros in 2001. For the full year, its operating profit was 20 million euros versus an operating loss of 49.9 million euros.

CEO Marco Isaia said: "Our full-year 2002 results reflect the effects of the efforts we're making since a long time within the company and the commitment of the entire Fila group worldwide and were achieved in a competitive market at a time of complex and uncertain economic conditions.

"Our operating result is back to profitability. This was achieved through both a significant reduction in fixed costs and an improvement in gross profit, testifying to our efforts to improve every item in our statement of operations.

"I'm very glad about both the positive results in Korea and our success in the US market, where the success of the Fila brand's re-launch was confirmed by increases in revenues and margins. As a result, Fila USA had slightly positive operating income.”

He added: "The road to complete recovery is not easy, and it will be very challenging to achieve good financial results in 2003.

"Nevertheless, I believe that our success in streamlining our business model, together with better management and control of all of our operating activities and our new product development and brand repositioning projects, will provide the fundamental basis to re-launch Fila, especially in Europe."