MILAN, Jul 24, 2002/ --- After nearly three years spearheading the creative repositioning of Bally, Scott Fellows is no longer creative director of the luxury Swiss label.

According to a company insider, Fellows was dismissed from the position last Thursday.

A spokesperson for Bally, however, maintains that the change is part of the company's overall reorganization strategy and that Fellows will remain as a creative contributor and a Bally board member.

"Scott will continue to be very involved in the creative aspects of the company, specifically that which applies to the image of the brand," she insisted.

"He will also be involved in Bally's runway show in Milan."

This is the second major management shift seen at the Swiss leather goods company in recent months.

Back in late April, the company appointed Marco Franchini -- a Gucci recruit -- to the post of CEO.

He replaced Federico Minoli, who had been brought in by Bally's owner, Texas Pacific Group, on an interim basis to consolidate and restructure the company's management after the departure of Gerald Mazzalovo in spring 2001.

Together with Mazzalovo, Fellows was tapped to oversee the re-launch of the classic leather company when it was acquired by TPG in late 1999.

An aggressive two-year restructuring took place: Over 100 stores were closed, new innovative product was infused into the line and the brand's image received a complete makeover.

Fellows is fully credited with creating the exceptional, high-end image for the brand.

According to sources, the current internal restructuring of the company has been prompted by the need to balance its strong creative vision with commercial and financial viability.

Over the last two years, Bally's original classic product has virtually disappeared from store shelves, replaced by super-hip fashion items.

Apparently, the majority of Bally's existing customers -- traditional leather goods purchasers -- were alienated too quickly by the abrupt change.

There is also industry talk that the exorbitant spending that characterized Bally's face lift led to the company's reorganization.

At one point, the source noted, a Porsche served as the company car.

Even simple items like shoe boxes were costing nearly $15 a pop.

For the company's first new concept flagship store, which opened in April 2001 in Berlin, Fellows selected architect Craig Bassam, and the project was rumoured to be another significant financial drain.

Bally is now looking to streamline future costs and get the company in tip-top condition for its next phase of brand building, which Franchini is set to oversee.

As far as the future creative management of the brand, the company has rehired Melissa Maish to serve as design and product director for the women's category.

Maish, who at one point worked alongside Fellows at Bally, was particularly revered for her innovative and best-selling shoe designs -- Bally's bread and butter.

The firm has also named Luca Ragonese to the post of men's design and product director.