MILAN – Aeffe SpA plans to lower prices, trim collections and streamline its retail network following a 20 percent drop in first-quarter revenues, which sent it into the red.

The Italian fashion group, which owns the Alberta Ferretti, Moschino, and Pollini brands and produces collections for Jean Paul Gaultier among others, reported losses of 298,000 euros, or $389,781, in the three months through March 31 compared to net profits of 6 million euros, or $9 million, in the same period in 2008. Sales contracted to 72.3 million euros, or $94.6 million.

Dollar figures were converted at average exchange rates for the periods to which they refer.

Executive chairman Massimo Ferretti said the group was responding to a “difficult and unique” situation “in a prompt and determined way.”

“We are working to reduce the size of collections and shorten sales campaigns,” he stated. “Our collections have been designed to offer models with a price positioning and use more in line with the new market trends. We are also reissuing select highly successful vintage collections…and have discontinued some minor lines. Finally, we are weighing options to rationalize our retail channel.”

Ferretti said these steps and job cuts announced last month would generate cost savings of around 10 million euros, or $13.6 million, in 2010.

Aeffe did not break down sales by brand, while revenues fell in all regions.