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MILAN, Feb 20 (Reuters) - Italian luxury group Prada

has been given access, ahead of any other potential

suitors, to the financial data of smaller rival Versace which

owner Capri Holdings ( CPRI ) has put up for sale, a source

close to the matter said on Thursday.

Prada has four weeks to conduct its assessment, the source

said, as it weighs an acquisition that would mark a significant

shift in strategy. No decision on whether to actually pursue the

deal has yet been taken at this stage, the source added.

Capri Holdingss is working with Barclays ( JJCTF ) to explore a

sale of its Versace and Jimmy Choo brands, sources told Reuters

this year.

Prada and Barclays ( JJCTF ) declined to comment. Capri Holdings ( CPRI ) was

not immediately available for a comment.

Prada last completed acquisitions of other brands in the

late 1990s and has been focusing on internal growth since then,

defying expectations it could aspire to create a larger Italian

fashion hub.

The acquisition of Versace would allow Prada to target a

different customer group, with tastes far from Prada's trademark

minimalism.

But the Hong-Kong listed group would also have to deal with

a challenging turnaround of the Medusa-logo brand, industry

sources said.

Versace reported a 15% decline in revenues in the third

quarter ending on December 28 and the operating loss increased

to $21 million in the period, from $14 million a year earlier.

Capri Holdings ( CPRI ) expects Versace's revenues to drop to $810

million in the 2025 fiscal year and the operating margin to

break even in the following fiscal year, according to long term

financial targets published on Wednesday.

The brand's performance and the sector's bleak outlook could

make it hard to set a price, complicating negotiations,

according to industry sources, who said a turnaround would

require investment.

Capri Holdings ( CPRI ), formerly known as Michael Kors, bought

Italian luxury brand Versace in 2018, for 1.83 billion euros

including debt.

The four week exclusivity deal was first reported on

Thursday by Italian daily Il Sole 24.