RICHARD CARING, the rag-trade billionaire, is in secret talks to buy Prada, the Italian fashion house.

It is thought that the family-owned Milan-based group, which was celebrated in the hit movie The Devil Wears Prada, has engaged in private talks with a handful of potential buyers. At least two private-equity houses are also looking at Prada, which is worth about €2 billion (£1.3 billion).

City sources suggest that discussions have been going on for a number of weeks and an investment bank has been advising the family. If Caring pulls off a deal, it would be an audacious coup for the 59-year-old businessman who seldom gives interviews and was little known only five years ago.

During the past few years Caring, who made his fortune supplying Sir Philip Green’s clothing empire, has assembled an investment portfolio that includes restaurants such as The Ivy and Le Caprice; the Wentworth golf club in Surrey; and London nightclub Annabel’s.

But a deal on the scale of Prada would propel the perma-tanned tycoon into a different league. He will inevitably face competition for the company, which has long been admired for its ability to distil the essence of modernity with its cutting-edge designs. But its owners, Miuccia Prada and her husband and chief executive, Patrizio Bertelli, may favour a sale to a private entrepreneur, who would be more likely to nurture the brand and keep it for the long term, rather than a private-equity group.

Earlier this year Prada hinted it might pursue a float. Last December it sold 5% of its shares in a €100m deal, giving an implied group valuation of more than €2 billion.

The appointment last April of a head of investor relations further fuelled suspicions that Prada was preparing to list. The fashion group originally announced an intention to float in 2000, but has postponed the offer four times since then.

Two other Italian fashion houses, Gianni Versace and Salvatore Ferrag-amo Italia, have indicated they are moving toward stock-market listings.

Luxury-goods companies are cashing in on unprecedented demand from the super-rich for their products. Many of the 800 or so companies that make up Italy’s luxury-goods industry have reached a crossroads and are facing generational change or the need to shift from an entrepreneurial family-owned business to a more managerial model.

The identity of the private-equity funds eyeing Prada is unclear, but Permira and Carlyle, the American firm, could be among those that are interested. In May, Permira, the British private-equity group, secured a controlling stake in the Italian fashion house behind Hugo Boss and Val-entino after winning over the owning Marzotto family. It paid €782.6m for a 29.6% stake in the group.

In the past two years Prada has cleaned up its balance sheet, divesting brands including Jil Sander and Helmut Lang and bought back the English shoemaker Church’s. The majority of its €1.4 billion sales come from the Prada brand with a smaller contribution from other brands such as Miu Miu.

Miuccia Prada, 55, is one of the few women at the head of a top fashion brand. In a rare interview with the International Herald Tribune in February, she said she was working harder than ever and worried about the speed of modern “fast fashion” and the need to keep up, even though she has long been regarded as fashion’s undisputed trendsetter.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive