Coach Inc (COH.N) will buy women's luxury footwear company Stuart Weitzman Holdings LLC, as it looks to expand its high-end offerings to better compete with rivals such as Michael Kors Holdings Ltd (KORS.N) and Kate Spade & Co (KATE.N).

Coach, known for its Poppy handbags, said it would buy Stuart Weitzman from private equity firm Sycamore Partners in a deal valued at up to $574 million.

Companies such as Michael Kors and Kate Spade have eaten into New York-based Coach's market share in North America with their affordable and trendier handbags and accessories.

Coach is realigning its business by cutting promotions and shuttering underperforming stores.

The company said on Tuesday it would make initial cash payment of about $530 million to Sycamore Partners and pay up to $44 million on achievement of certain revenue targets over the three years after the acquisition closes.

Sycamore Partners acquired Stuart Weitzman last year as part of its $2.2 billion purchase of Jones Group Inc, the fashion company that owns retail chains Nine West and Jones New York.

Reuters reported on Monday that Coach was nearing a deal to buy Stuart Weitzman.

The Wall Street Journal first reported that the two companies were close to a deal.

Coach's shares were up 1.5 percent at $37.27 in premarket trading on Tuesday.