Gulf investment firm Investcorp has ended talks to buy a majority stake in Italian fashion house Roberto Cavalli, several sources said, as it was unwilling to pay the 450-million-euro ($612 million) price tag.

The 73-year-old designer was hoping to receive an offer from Investcorp by a June 30 deadline, but the Bahrain-based private equity company walked away from the negotiation table, said two sources close to the deal.

"The company lacks appeal and there is a discrepancy between the asking price and the cost of turning around the business," said one of the sources.

Price expectations for around 60 per cent of the company were based on a multiple of 18 times earnings before interest, tax, depreciation and amortisation (EBITDA) of 25m euros.

Both Cavalli and Investcorp declined to comment.

The sources said Cavalli had approached Investcorp in May after negotiations with London-based buyout firm Permira stalled over valuation disagreements.

Permira was prepared to offer more than 300m euros to secure control of the company but the designer was adamant on pricing, the sources said.

"Permira's best bid would not even match Cavalli's minimum threshold and the designer would not lower the bar," said one of the sources.

Permira, headquartered on London's Pall Mall close to Buckingham Palace, declined to comment.

"Investors have become wary of a company which has been on the market for years," said one sector banker, who recalled a series of failed attempts to sell Cavalli to investment funds such as Clessidra in 2009.

Cavalli is facing declining growth, partly due to a steep contraction in Russian orders caused by the rouble's depreciation after the crisis in Ukraine.

While the brand is well established in Russia and Eastern Europe, the Middle East and Latin America, it has yet to take off in China and other fast growing Asian markets.

The sources said this was because the Florentine fashion house has a weaker distribution network in Asia and has experienced a general lack of enthusiasm for its exuberant style.-Reuters