Private equity’s costliest excursion on to the catwalk risks turning into a flop as Permira, the UK buy-out house, nears completion of talks with lenders to Valentino, the Italian fashion house, about renegotiating its €2.5bn (£2.1bn) debt.

Valentino, dressmaker for some of the world’s most glamorous celebrities from film star Nicole Kidman to Crown Princess Marie-Chantal of Greece, was bought by Permira in a €5.3bn deal in May 2007, the peak of the credit bubble.