Despite high street stores such as Kitson and H&M expanding rapidly in Japan, the economy is still pretty slow, which has affected more expensive brands pretty badly.
Its so bad that Versace has closed all of their directly-managed stores and has even announced that they're planning to close the Versace Japan public relations office by the end of this month.
Of course they're not the only brand that being hit, many other luxury brands such as Chanel and Louis Vuitton have also felt the effects of the worldwide economic crisis which has resulted in declining sales and/or store closures. I also heard that French Connection has announced their plans to close all their stores in Japan which is quite a harsh blow to the Japanese fashion industry.
However, not all hope is lost, according to an unnamed "informed source", Versace plans to open new stores in Japan after autumn 2010, and that they are currently "reviewing their business strategy". Hopefully, this means that the pullout is merely a temporary closure....
Cross your fingers!
Information and image taken from http://tokyofashion.com/versace-withdraws-from-japanese-market-sources-say/