Blackstone close to buying 20% stake in luxury group Versace

US private equity firm Blackstone Group is close to buying a minority 20-per cent stake in Versace under a deal which values the Italian luxury fashion group at around €1.1 billion ($1.51 billion), according to media reports.

Blackstone would buy the stake for around €200 million ($275 million), which would be its first investment in a luxury fashion group, Financial Times yesterday reported, citing two people with knowledge of the talks.

After the death of her brother Gianni Versace in 1997, Italian fashion designer and current vice-president and chief designer of the Versace Group, Donatella Versace, owns 20 per cent of the company, while her daughter Allegra owns 50 per cent. The Versace family is expected to offload some of its stake.

The Versace family has been trying to raise around €150 million in order to expand and is reported to have hired Goldman Sachs and Banca IMI to run an auction.

Versace has recovered from the financial crisis, which led to near bankruptcy in 2004. The recovery was led by its current CEO Gian Giacomo Ferraris, who aims to eventually list the company.

Founded in 1978 by Gianni, Versace is one of the world's leading fashion houses. It designs, markets, and distributes luxury clothing, accessories, makeup, watches, perfumes, and home furnishings under the various brands.

Some of the celebrities who have donned Versace line of brands are Halle Berry, Lady Gaga, Madonna, Demi Moore, Britney Spears, Jennifer Lopez, Sir Elton John, and Beyoncé Knowles.