By  on July 17, 2008

TOKYO — Bally is cutting the retail prices of its fall-winter collection in Japan by 25 to 30 percent, underscoring the weakness of the luxury goods market here.

“We would like to up our competitiveness as a luxury brand by reviewing closely the pricing policy and the location of our stores,” Bally International chief executive officer Marco Franchini said in an interview. “Japan is still a big market and there is growing room for us. We would like to appeal again to Japanese clients as a luxury brand so that we can compete with brands such as Gucci.”

Bally’s move comes a little more than a month after Salvatore Ferragamo said it would cut the retail prices of some pre-fall and fall-winter items by an average of 10 percent to jump-start stagnant sales in Japan.

Franchini said Bally can afford to adjust prices here because the company has ended its relationship with its former distribution partner Itochu Corp. Last month, Bally International bought Itochu’s 80 percent stake in Bally Japan, making it a fully owned subsidiary. Bally also has acquired direct control of its boutiques in Hong Kong and China from franchisees.

Bally plans to expand the size of its shop-in-shops in Japanese department stores, Franchini said. Bally Japan has freestanding stores in Ginza and Osaka and a network of about 30 shops-in-shops. Franchini estimated Bally Japan’s sales for the year ended Jan. 31 would be 4.71 billion yen, or $44.7 million.

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