Princess Diana's famous sheep sweater sold for $1.1 million at auction, making it the most expensive sweater in the world

• Princess Diana's famous sheep sweater sold for $1.1 million at auction on Thursday.
• Its designers told Insider that Diana had a big impact on the company when she wore it in 1981.

Princess Diana's sheep sweater sold for an unexpected $1.1 million at the Sotheby's Fashion Icon auction on Thursday.

Sotheby's said in a press statement that the sweater fetched a total of 44 bids, and the price jumped from $190,000 to its final price of $1.1 million after a 15-minute bidding battle.

Insider previously reported in June that the iconic sweater worn by Diana had been estimated to sell for between $50,00 and $80,000.

When the lot finally went to auction on Thursday, it was sold for the staggering price of $1.143 million, making it the most expensive sweater ever sold, according to the press statement from Sotheby's.

The sweater also now holds a record for the most expensive garment of Princess Diana's, previously held by a velvet ballgown she had worn for a royal portrait, which sold for $604,800 at a Sotheby's auction earlier this year.

The sheep sweater is a design by British brand Warm & Wonderful, founded by Joanna Osborne and Sally Muir. At the time that Princess Diana wore the sweater in 1981, it was still a small brand, and Osborne and Muir told Insider it had a huge impact on the company.

"It was a total surprise that she had it in the first place; the first we knew was when we saw her on the front of the newspaper wearing it," they said.

According to Sotheby's, co-founder Osborne was searching in their archives for a sample pattern in March 2023 and instead emerged with what they suspected was the original sheep sweater worn by Diana.

"Further investigation convinced the team: the damaged cuff, the shape, the single sheep at the shoulders, tiny variations in the sheep's eyes which were individually sewn on," a catalog note on the Sotheby's listing said.

Designers Osborne and Muir told Insider that their decision to let the sweater be auctioned was a no-brainer. "We didn't want the responsibility of looking after it and keeping it away from moths. The letters are part of its history, so we thought the new owner should have them as well," they said.

The letters they mentioned are an added bonus for the buyer, who not only won the sweater but also two Buckingham Palace letters from 1981 that were addressed to Osborne. These were sent by Diana's private secretary at the time, Oliver Everett.

The first letter explained the sweater had been damaged and that Princess Diana "likes it very much and would love to see it restored to health or replaced," as shown in an image from the Sotheby's auction listing.

The second letter thanks Osborne for their work, noting that Diana "will be very glad to have this sweater back and be most grateful to you for having re-done it." Osborne also apologizes for the lateness, writing: "Your parcel got amongst some late wedding presents waiting to be dealt with."

Buckingham Palace declined to comment.