Dive Brief:

• U.S. handbag and footwear retailer Coach has emerged as a likely bidder for upscale footwear company Jimmy Choo, which last month said it was exploring a sale, the U.K. Telegraph reports.

• The deal could top one billion pounds, according to the report. The companies declined to comment to the Telegraph. 

• Coach has reportedly been interested in expanding, including via a possible takeover of handbag maker Kate Spade. In 2016, luxury U.K. brand Burberry was said to have declined several bids from Coach. 

Dive Insight:

Despite headwinds in the luxury retail space, Coach is on the rise. After diluting its brand (and with that its ability to demand top dollar) via constant discounting and its reliance on off-price sales, CEO Victor Luis has pulled out of hundreds of U.S. department stores. 

Despite the pullbacks from department stores and discounts, Coach reported in January that second quarter fiscal 2017 net sales rose 3.8% to $1.32 billion from $1.27 billion in the year-ago period. Coach's total North American brick-and-mortar same-store store sales rose approximately 4%, while aggregate North American same-store sales increased approximately 3%, including the negative impact of e-commerce. Sales at North American department stores declined some 30% on both a POS and net sales basis. 

But the company’s 2015 purchase of women's shoemaker Stuart Weitzman for $574 million has paid off handsomelylifting results in the last quarter with a 26% increase in sales. Coach CEO Victor Luis has said the company is looking to diversify its brand further in light of that success. The retailer is also working to attract more young shoppers, most notably with its $10 million deal last year with pop singer and actress Selena Gomez to design her own product line and become the face of its brand.

Jimmy Choo rose to prominence in the early part of the 21st century, during the run of the television show “Sex and the City,” which positioned the uber-pricey footwear as a symbol of success for fashionable, independent women in New York.   

Women's shoes remain the core of the product offer, alongside handbags, small leather goods, scarves, sunglasses, eyewear, belts and fragrances and has more recently expanded to men's shoes — sales of which are growing more swiftly than sales of women’s items, even if they remain a smaller slice of the pie. Yet sales have been sluggish of late, as the waning post-Brexit pound has helped dampen demand in Europe and the strong dollar has hurt sales Stateside — though sales in China in particular have remained robust.