Is Michael Kors about to buy Versace for $2 billion?

US luxury group Michael Kors is set to sign a deal to buy Milanese fashion house Versace in a transaction worth about $2bn, according to Reuters.

The agreement, expected to be announced on Tuesday morning, will see the Versace family sell their 80 per cent stake in the business and US private equity firm Blackstone sell the 20 per cent they acquired in 2014.

Donatella Versace, who has helped run the company with her brother Santo Versace since the murder of their sibling and the brand founder Gianni in 1997, has reportedly called a meeting with employees on Tuesday to announce the sale.

In the reported deal, the Versace family will retain some creative control in the company.

Michael Kors, whose namesake label is best known for its leather handbags, has made no secret of its ambition to grow its portfolio of high-end brands after snapping up British shoemaker Jimmy Choo for $1.2 billion (£896 million) last year.

Sales of Kors’ own brand, which was built on accessibly priced handbags and accessories, have suffered in recent years, but following the Choo acquisition the Kors group announced a 26.3 per cent rise in revenue in the quarter ending in June 2018, with Choo contributing 17.2 per cent of the overall figure.

The Michael Kors group is competing with rival Tapestry Inc., owner of the Coach and Kate Spade brands, to build a U.S.-based multibrand fashion empire, along the lines of French conglomerates LVMH and Kering SA. In acquiring Versace, famous for full-blown Italian glitz and glamour, Kors would add a premium, red carpet brand to its growing business.

In September last year, Donatella brought back 1990s supermodels Carla Bruni, Claudia Schiffer, Naomi Campbell, Cindy Crawford and Helena Christensen to walk the fashion house’s catwalk show, which paid tribute to the brand founder, her brother Gianni’s best-known designs.

Could it have been Donatella’s swansong?