Versace is reportedly set to be snapped up by US fashion group Michael Kors in a $2bn (£1.5bn) deal.

The Milan-based label, founded in 1978 by Gianni Versace, has been run by his family since he was murdered 21 years ago.

Sources confirmed details of the deal to Reuters on Monday, after it was first reported by Italian newspaper Corriere della Serra.

There was no immediate comment from either of the fashion companies.

Michael Kors, best-known for its leather handbags, has made clear its ambition to grow its stable of high-end fashion brands in an industry still dominated by European players such as Louis Vuitton owner LVMH.


Last year, the American group bought Jimmy Choo - whose stilettos were made famous by TV series Sex and the City - for $1.35bn.

Versace is 80% controlled by the late designer's family, with private equity firm Blackstone holding a 20% stake.

The family will reportedly retain a role after the takeover.

Donatella Versace, Gianni's sister and the company's artistic director, has reportedly called a staff meeting on Tuesday.

Versace, known for its bold and glamorous designs, is one of a clutch of family-owned Italian brands seen as attractive targets at a time when the luxury industry is benefiting from strong demand from China.

However according to Neil Saunders, managing director of consultancy GlobalData Retail, both Versace and the Michael Kors brand still have issues to address to improve their appeal.

"We believe that some of the work required on Versace, which includes toning down some of the brasher elements of the brand which are out of step with the more subtle tone preferred by modern consumers, are precisely the issues with which Michael Kors has struggled and has yet to satisfactorily resolve," Mr Saunders said.

Shares in Michael Kors closed 8% lower on Monday.