Donatella Versace is to step down from her role as chief creative officer of the Versace brand after almost three decades at the company founded by her late brother Gianni, owner Capri Holdings said on Thursday.

The move comes amid reports that Prada is moving closer to a deal to buy Versace from Capri after agreeing to a price of nearly 1.5 billion euros ($1.6 billion).

Dario Vitale, former Design and Image Director at Miu Miu, a smaller brand within the Prada group, will take Donatella's role as Chief Creative Officer effective on April 1.

Donatella, 69, will take on the role of chief brand ambassador at Versace.

"It has been the greatest honor of my life to carry on my brother Gianni's legacy. He was the true genius, but I hope I have some of his spirit and tenacity," said Donatella, who helped to keep the business going after Gianni was killed in Miami in 1997.

"I am thrilled that Dario Vitale will be joining us, and excited to see Versace through new eyes," she added.

The announcement is the latest in a series of high-profile designer changes in the industry as it seeks to rebuild its business amid slowing luxury demand in China and inflation-weary shoppers.

Earlier this year Gucci design chief Sabato De Sarno left the Italian label after less than two years in the job.

BRAND'S CHALLENGES

Donatella Versace gave the brand a bold and provocative aesthetic. Her connections with many big-name celebrities helped to reinforce the brand's appeal.

However, her departure comes at a difficult time for the group founded by Gianni Versace in 1978, which has reported operating losses for the last three quarters and is up for sale, according to sources.

Versace reported a 6.6% drop in revenues to $1.03 billion for the fiscal year ending March 2024. Sales are seen to fall further to $810 million in 2025, before returning to growth in 2027.

Versace was bought by U.S. group Michael Kors, now known as Capri Holdings, for 1.8 billion euros ($1.87 billion) in 2018. The Versace family received 150 million euros of the sale price in Capri shares.