Editor's Note: Diesel duds done dirt cheap

A boxer knows when he's crushed however a smart and courageous boxer will take his beating and learn from it for his next fight.

Diesel Australia's decision to slash its retail and some wholesale prices to level the playing field against international competitor brand G Star - and presumably Miss Sixty, True Religion, Ksubi, Sass and Bide and Seven - will likely leave few dumbfounded.

Lauded as one of the pioneers of the high-end, high-price jeans category, Diesel Australia has always emulated the Italian-headquartered label's international price points since first bought here by licensees Theo Onisforou and Mark Keighery some 20 years back.

But times have changed and with Onisforou admitting G Star "really have dominated, they've outsold us", something had to give.

Onisforou, who in a former life was Kerry Packer's chief investment manager, had argued for some time Diesel's price points were not sustainable here. However he was forced to wait until February before the sheltered Diesel International executives saw first-hand why their loyal distributor was not able to shift more product here.

What Renzo Russo's honchos discovered was what the rest of us already knew. Australia's extremely competitive denimwear market has limited space for a premium denim brand selling its collections for 20 per cent more than its competition - no matter what its lineage.

It is always a difficult task to make such a drastic change to your pricing structure without compromising brand equity. Similar queries arise every time a designer releases a diffusion line or when a high-end fashion house collaborates with a mass-market retail chain.

Cynics will rightly argue there's no avoiding a compromise on quality when a brand that formerly sold a pair of jeans for up to $600 can now afford to sell them for $200 less.

For its part Diesel Australia argues the status quo will remain. Its jeans will still be made in Italy from Japanese denim just as they always have. In short, Diesel maintains it has taken the hit so its stockists don't have to.

It remains to be seen what impact the repositioning will have on retailers and whether this will in turn translate to the buying public.

On one hand its more affordable price points will likely prove much more attractive to the cashed-up youth market introducing a whole new segment to the label. On the other, it could be considered a high-risk strategy where should the venture prove unsuccessful, Angus Imports' grip on the licence will surely be compromised.

Whatever the result, Onisforou's efforts at getting a global brand to alter its traditional pricing structure for just one market should not be under-estimated.

And further proof the old brawler still has plenty of fight left in him.