MILAN, Italy - U.S. private equity firm Blackstone is among potential bidders for a minority stake in Italian fashion house Versace, sources told Reuters on Wednesday.

Versace, which is selling a 15-20 percent stake to fund growth, is yet to draw up a short list of potential buyers and is still considering expressions of interest, other sources said.

A representative for Blackstone declined to comment.

Versace, known for its tight-fitting dresses popular with stars like Lady Gaga, will choose two or three potential investors by year-end before starting talks, one of the sources said.

Chief Executive Gian Giacomo Ferraris said in September Versace planned to finalise a shortlist of potential investors by mid-October.

Private equity firms Ardian and Permira are likely candidates to take a minority stake in the company, along with Italy's state-backed fund Fondo Strategico Italiano, sources say.

The stake sale is one step towards a public listing for the company, which Ferraris said in September could take place in the next three to five years.

Versace is entirely controlled by the family of late founder Gianni Versace, whose sister Donatella has a 20 percent stake, brother Santo 30 percent, and niece Allegra 50 percent.

Blackstone has made investments in Italy before, including in northern Italian lakeside theme park Gardaland. It is currently in talks with Italian publisher RCS Mediagroup over the sale of some real estate in Milan.

Italian luxury brands have attracted strong interest from foreign investors recently, leading to the sale of top brand Valentino to a Qatari fund in 2012, and cashmere company Loro Piana to French conglomerate LVMH earlier this year.

Many Italian luxury groups, including Giorgio Armani, Ermenegildo Zegna, Roberto Cavalli and Missoni, are still controlled by their founders and founding families.

Two luxury companies that have chosen to list in Milan, Salvatore Ferragamo and Brunello Cucinelli, have both seen their shares gain more than 50 percent in the past year.