Designer brand Gianni Versace SpA is withdrawing from the Japanese market, nearly 30 years after bringing its chic to the world's second largest economy.

The Italian fashion house is closing down its three stores - in Tokyo, Osaka and Chiba - and will complete the liquidation measures by the end of the year.

Versace blames the decision on a sudden slump in consumer spending, particularly at the higher end of the market, since the economic crisis struck last year. But the news for Versace-lovers here is not all bad as the company has indicated that it plans to return in the not-too-distant future.

"The Versace boutiques in Japan no longer represented the brand image and it was felt to be more advantageous for the company to close them and start with a clean slate," Federico Steiner, an external spokesman for the Milan-based company, told Bloomberg in a statement.

The phones at Versace's three outlets in Japan have been disconnected.

Versace is the latest of the mega-brands to rethink their strategies for Japan, whose wealthy shoppers not long ago made Tokyo's Ginza district a lucrative address.

In December, LVMH Moet Hennessy Louis Vuitton announced that it had cancelled a plan to build a 12-storey branch in Ginza, although Sweden's H&M clothing store and home-grown fashion outlet Uniqlo have both since opened stores on Japan's most fashionable boulevard. Both companies sell much cheaper clothing and accessories and are faring well, despite the economic downturn.

The market for luxury imported goods contracted 10 percent in 2008 from the previous year, according to Yano Research Institute Ltd. And the figure of Y1.06 trillion (€8.1 billion) in sales is expected to decline to Y992.7 billion (€7.6 billion) this year. At its peak, in the heady days of 1996, the Japanese market was worth a staggering Y1.9 trillion (€14.6 billion).

Analysts believe that the emerging trend for "cheap chic," particularly among younger Japanese consumers will continue in the coming years.

The shift away from Japan's obsession with brand-name products will be "a lasting trend that will surely go on because the economy is going to be in trouble for a long while," said Martin Schulz, senior economist at Fujitsu Research Institute.