Lanvin is in talks to sell a stake to a Qatar-based investor in a deal that could value the French fashion house at around 150 million euros ($220 million), according to industry and financial sources close to the matter.

The talks, subject to an exclusivity clause that runs until the end of October, come as the outlook for the luxury goods market deteriorates and credit facilities dry up, strengthening the hand of cash-rich investors.

"Due diligence is ongoing. By the end of October, if the parties have not agreed on a price, Lanvin will be put back on the market," one financial source said.

Lanvin moved into profit last year for the first time in decades. The talks get under way as loss-making Christian Lacroix continues to look for a buyer.

Lanvin, and its smaller rival Balmain, are enjoying a revival. Analysts put Lanvin's down to fashion buyers' enthusiasm for the work of Lanvin's designer Alber Elbaz, who has infused new life into the brand in recent years.

According to the financial source, Elbaz holds more than 10 per cent of the company's equity.

Lanvin's controlling shareholder is Taiwanese media magnate Shaw-Lan Wang, a francophile, who is looking to sell a stake of between 35 and 40 per cent, industry and financial sources said.

"Ms Wang wants to sell but she also wants to keep control," said one industry source who is close to Elbaz. "That is why a deal is far from being reached."

Wang acquired a holding from L'Oreal in 2001 and bought out other investors in 2003. Last year, she sold Lanvin's perfumes unit to France's Inter Parfums for 22 million euros, leaving the group without one of the traditional industry vehicles for brand development.

Lanvin's lack of full control over trading in Japan is a further complication.

Founded  by Jeanne Lanvin in 1889, Lanvin is the oldest French couture house and made revenue last year of between 100 and 110 million euros.

The financial source said the business could be valued at between 1 and 1.5 times (annual) sales.

At the beginning of this year, Lanvin chief executive Paul Deneve told Women's Wear Daily the company was expecting revenue growth of 40 per cent in 2008.-Reuters