Another source said €250 million could be pumped into the luxury brand.
"The company is in the process of seeking a minority investment to bring in financial resources and accelerate development of the brand," said a spokesman, confirming Italian media reports.
The source said that Versace hopes to select an investor next month and complete by the end of this year an investment of around €250 million for a stake of 15 to 20 percent in the company, valuing it at €1.2 to 1.6 billion overall.
Italian daily Il Sole 24 Ore reported that a shortlist of three investors will be established during Milan Fashion Week, which opened on Wednesday, and that the investment would take the form of a €150 million hike in capital and the sale of €50 million in existing shares.
The newspaper cited among possible candidates Qatar's sovereign wealth fund allied with the Italian Strategic Fund, Italy's state-backed sovereign fund. The company declined to speculate on possible investors.
Versace was founded in 1978 by Gianni Versace. Following Gianni's 1997 murder at his Miami Beach mansion his sister Donatella took over as head of design.