SHOEFAYRE, the Co-op Movement's long-established footwear business, is in merger talks with high street shoe retailers Stead and Simpson.
Both businesses are based in Leicester and in a statement released by Shoefayre's principal shareholders, the Co-operative Group, a spokesman emphasised that the Co-op-owned business is not being sold.
The statement said the board of Shoefayre have been in "preliminary talks" with Stead and Simpson regarding a potential merger, adding: "These have proved encouraging and we are now planning further talks over the next few weeks to explore the opportunities in detail."
Said the spokesman: "Talks are at an early stage and, like Stead and Simpson, we will only work to bring about a merger if clear business benefits can be identified. Shoefayre operates in a very competitive retail sector and we want to build on the good progress we have made over the last year and ensure success in the years ahead.
"To do this, we must look at opportunities to develop and expand."
Shoefayre was established in 1961 and now operates 317 outlets around the country with a total workforce of 2,636. In addition to the Co-op Group, nine regional societies are shareholders, including the UK's three biggest independents, United Co-operatives, Midlands Co-op and Oxford, Swindon & Gloucester Society.