Kate Spade's Cameron Street Collection.

Shares of Kate Spade & Co. rose 3.6 percent as market speculation heated up on possible increased interest from both Coach Inc. and Michael Kors Holdings Ltd.

The shares on Monday closed at $18.40, but had hit an intraday high of $18.75

Hedge fund Caerus Investors pushed Kate Spade in November to consider putting itself up for sale. In late December, WWD noted that speculation had centered on Coach and Kors, mostly because the chief executives of those brands have already expressed a desire to make an acquisition. At the time, neither executives for Kate, Coach nor Kors could be reached for comment. Kate is working with Perella Weinberg on identifying potential buyers.

The attention on Coach and Kors as possible buyers make sense, since all three are direct competitors in the handbag market, and an acquisition by one will give it increase market share in the sector over the other.

In a research note Monday by Cowen & Co.’s Oliver Chen, he said that 2017 “will be a tough year for the entire handbag and accessory category as consumers shift spend into beauty, health & wellness and experiences.” He also noted that distribution rationalization and the lack of an emerging new “it-bag” styles may drive flat sector growth.

As for Coach and Kors as possible suitors, he said Coach’s in-store execution, outlet renovation program and supply chain would be the key benefits for Kate.

With Kors, Kate would benefit from expertise in “international and fashion content, and wearables plus cosmetics would also be potential synergies.”

Chen also believed that financial buyers and luxury goods firms such as LVMH, Kering and Richemont would also likely take a look, although he noted that luxury goods firms tend to prefer ownership in brands with longer heritages. He also said there’s an 80 percent chance a deal could happen in the first half of 2017.