For more than a century it has been regarded as the quintessence of Italian chic, creating jewellery at once admired by the rich and famous and shamelessly imitated by lesser fashion houses. Now, four years after the opening of its flagship store on New Bond Street, Bulgari, the luxury goods group, is close to securing a site in Knightsbridge for its first London hotel.

The Times has learnt that the company, which is listed on the Milan stock exchange, is preparing to sign a deal with a firm of developers to create a 78-room hotel with five apartments on the site of the former Normandie Hotel, overlooking Knightsbridge Green.

It is understood that the hotel, for which a planning application has just been lodged with Westminster City Council, will be similar in style to the first Bulgari Hotel in Milan, designed by Antonio Citterio, the Italian architect. Mr Citterio will work on the project alongside David Walker Architects of London.

The Normandie Hotel was built in 1911 as the Knightsbridge Palace Hotel, being renamed in 1937 and closed in 1977. Since then, the site has been subject to many proposals, most involving a return to hotel use. In 2006, Waterloo Real Estate was granted permission to build a 155-room hotel, only to sell the site to three private investors the following year.

The new owners, believed to be Spanish, have now submitted a fresh planning application with much larger rooms more suited to the Bulgari formula.

Construction industry sources suggest that the proposed project, involving the demolition of the existing buildings, could cost £80 million to £100 million and will take three years to complete. The 11-storey building will have a stylish restaurant serving modern Italian food.

Bulgari moved into the hotel market in 2001 when it signed a joint venture with Marriott International, the American operator. The declared strategy was for the two companies to invest $140 million (£89 million) in equity and loans over five years, with Bulgari taking a 65 per cent stake and Marriott the balance.

The aim of the joint venture was to identify and develop sites in London, Rome, Paris, New York, Miami, Southern California and a number of island resorts, but to date it has only opened properties in Milan and Bali. It has examined several potential sites in London over the past six years, including the former Naval and Military Club, better known as the In & Out on Piccadilly.

The company, in which the Bulgari family have a 52 per cent stake, is among a growing band of design and fashion houses expanding into lifestyle hotels. The list includes such names as Versace, Ferragamo, Christian Lacroix, Giorgio Armani, Moschino and Missoni, although Bulgari appears to be heading the race to open the first in London.

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