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LVMH-backed private equity firm L Catterton has agreed to buy a 60% stake in Italian fashion company Etro.

That's according to sources.

They say the deal values Etro at about $590 million.

Etro said in a statement that the fund was taking a majority stake in the company, while the Etro family would retain "a significant minority interest."

It did not go into specifics and gave no financial details.

The statement said that Gerolamo Etro, who founded the company in 1968, will be the chairman and the deal is set to be closed by the end of the year.

Meantime, another Italian family-owned fashion label is luring outside investors to fund its expansion.

Ermenegildo Zegna is set to list in New York through a $3.2 bln merger with a U.S. investment vehicle.

The move looks set to help the menswear label expand in Asia and the United States.

Under the deal, the Zegna family will sell a portion of their holdings, but retain 62% of the combined company.