April 13 (Bloomberg) -- Polo Ralph Lauren Corp., the maker of Ralph Lauren and Club Monaco clothes, will spend about $370 million to buy control of its business in Japan, the company's second-largest market.

The company agreed to buy out the license that allowed companies such as Onward Kashiyama Co. to market Polo brands in Japan. Polo held 50 percent of the license. It also offered to buy the 80 percent it doesn't own of Impact 21 Co., which holds the right to market Polo items such as jeans in Japan.

Polo will gain control over its products in Japan, where it plans to add stores and develop its women's accessories line. The company is examining all of its licenses to determine which to buy out, President Roger Farah said on a conference call.

``Having control in Japan will allow Polo Ralph Lauren to improve and upgrade its business,'' said Armando Branchini, vice president of Intercorporate, a Milan luxury goods consulting company.

Polo won't provide the impact of the purchases on earnings until May, Farah said. Polo shares rose 10 cents to $93.99 at 4 p.m. in New York Stock exchange composite trading. The shares have risen 58 percent in the past year.

Polo agreed on March 29 to buy the 50 percent it doesn't own of Polo.com for $175 million after traffic to the Web site rose 30 percent last year. The company will buy out the seven- year-old venture, Ralph Lauren Media LLC, from General Electric Co.'s NBC Universal Inc. and ValueVision Media Inc.

Asia Licenses

The company still licenses its products in most of Asia, where it expects about a third of future sales and profit to come from, Farah said. Polo's products are sold through licensees in Hong Kong, China, Malaysia, Singapore, Korea and Australia. In Japan, children's, home and golf products are still marketed by other companies, he said.

Luxury brand penetration in Japan is already much higher than in other regions, according to HSBC analyst Antoine Belge.

Fashion brands including Valentino and Salvatore Ferragamo have moved to control their operations in Japan to exert more influence over both product and distribution as competition increases in the 160 billion-euro ($216 billion) a year luxury goods market. Polo has sales of about $450 million in Japan.

Polo's luxury products have been growing more slowly in Japan than other regions, something the company plans to reverse by increased investment, Farah said.

``The accessory business in Japan is very underdeveloped,'' Farah said. ``It is not at all what we are willing to accept.

Premium Prices

Polo will offer 2,600 yen a share in cash for Impact 21, 18 percent above the closing price of the Tokyo-based company today. Polo will buy at least 9.24 million shares for 24 billion yen ($202 million), Impact 21 said in a statement filed to the Tokyo Stock Exchange.

Impact 21's sales of $263 million represent about 60 percent of Polo's Japanese market. Onward Kashiyama, Impact 21's largest shareholder, has agreed to sell its 41 percent stake for a gain of 6.8 billion yen.

Polo Ralph Lauren also said it will spend about 2.7 billion yen ($23 million) for the remainder of its Japanese license. Funding for the transaction will total about $150 million, the company said.

To contact the reporter on this story: Sara Gay Forden in Milan at sforden@bloomberg.net; Mari Murayama in Tokyo at mmurayama@bloomberg.net

Last Updated: April 13, 2007 16:12 EDT