London-based Kors a year ago snapped up shoemaker Jimmy Choo Plc for about 896 million pounds ($1.2 billion), expanding beyond its namesake brand.
The sale of Versace, which is known for its Medusa head logo, was sealed on Monday, three sources familiar with the talks confirmed to Reuters.
The Versace family controls 80 percent of the company while Blackstone owns the remaining 20 percent. Most Versace bags cost more than $US2,000, while you can buy a Michael Kors handbag at Macy's for less than $US100.
The stock market didn't react well to reports of an impending deal, with Kors shares trading at $66.11 at 11 a.m., down 9 percent.
This sale would give Michael Kors an invaluable foothold in the European luxury fashion market.
This won't be the first time that Michael Kors Holding Ltd. dropped a large amount of cash in order to take mega-successful brand under its wings.
Several Parties Italian newspaper Corriere della Sera reported earlier that Versace could be sold this week for about $2 billion, with several groups interested including Kors and Tiffany & Co.
"They didn't feel the need to invest so much money into another Italian fashion brand. It was overpriced", a source said. Versace is of course one of the most recognizable and beloved high-fashion outfits in the world.
Givi in turn is half-owned by Allegra Versace Beck, daughter of Donatella and niece of late founder Gianni. Donatella serves as creative director, while Santo is chairman.
Blackstone, whose stake acquisition valued Versace at $1.4 billion in 2014, declined to comment.
The company posted revenue of 686 million euros in 2016 and returned to profitability in 2017.
Saunders said that Michael Kors should work to tone down "some of the brasher elements" of the Versace brand in order to appeal to modern consumers.
Versace's net profit last year was just under $22.7 million, compared with a net loss of $12 million the previous year.