MILAN, Jan 10 (Reuters) - Italy's Prada is

considering buying fashion group Versace from U.S. Capri

Holdings, daily Il Sole 24 ore reported on Friday.

Citi is acting as adviser to Prada, the report said, adding

Capri Holdings ( CPRI ) had mandated Barclay's to find potential buyers.

The Italian financial daily added that other fashion groups,

as well as private equity funds, would also be interested in

Versace, but that a value for the Italian maison was still being

discussed. It said Prada did not comment on the report.

Last month, trade journal Women's Wear Daily had reported

that the U.S luxury conglomerate, which also owns Michael Kors

and other fashion groups, was working to find buyers for some of

its brands, including Versace and luxury shoemaker Jimmy Choo,

in order to focus on a turnaround plan for Kors.

In November, Capri posted a bigger-than-expected drop in

quarterly revenue, hurt by execution missteps across brands and

a global slowdown in luxury goods demand.