NEW YORK, United States — For the luxury industry, future growth may be at its feet.

Footwear is the product category thought to have the greatest potential for rapid expansion. It has certainly attracted the interest of some of America's biggest fashion players. Just last year, Michael Kors acquired Jimmy Choo for £896 million (or about $1.2 billion), quite a windfall for previous owner JAB Holding, which bought the British luxury shoe label in 2011 for a little over £500 million. Meanwhile, Tapestry's 2015 purchase of fast-growing accessible-luxury line Stuart Weitzman for $574 million has helped to boost its bottom line as the newly formed American luxury group has focused on improving performance at Coach and Kate Spade New York.

On the other side of the Atlantic, Europe's biggest mega-brands have reason to be just as enthusiastic about the category. At Gucci, for example, shoes drove 19 percent (€1.2 billion) of the brand's 2017 revenue, up from 13 percent (€409 million) in 2011. And Louis Vuitton, which has also enjoyed traction in shoes, invested more than €30 million on building a footwear product-development facility near Venice's Riviera del Brenta.

The wider market for luxury shoes hit €18 billion in 2017, up 10 percent year on year, according to Bain & Company. In terms of percentage growth, it was matched only by jewellery. But the size of the footwear category is still dwarfed by handbags, worth €48 billion in 2017, and apparel, which generated €61 billion, signalling significant space for growth.

Footwear is attractive for other reasons, too. “Shoes wear out, so their replacement cycle is short — even established consumers need to buy them again and again,” wrote Luca Solca, head of luxury goods at Exane BNP Paribas, in a recent report. And even though there are plenty of shoes priced over $1,000, like handbags, footwear has lower cost-per-wear and higher margins than apparel.

Consumers are also spending more on shoes than ever, averaging $248 on shoes in 2016, up from $212 in 2006, according to data from the American Apparel and Footwear Association. And they're buying more pairs, too, at least in the US: Americans purchased an average 7.6 pairs of shoes in 2016, up from 5.9 pairs in 1996. "In the past you only needed three or four pairs of shoes and you were sorted," said Sagra Maceira de Rosen, non-executive chairperson of Naga Group and co-author of The Towering World of Jimmy Choo. "Now, there are so many more categories. Fashion is driving the market more than ever before."

But footwear is more complicated than it looks and performance in the category has been inconsistent from brand to brand. “There is significant polarisation between brands,” said John Guy, an analyst at Mainfirst AG. “Some of it has to do with product and price positioning.”

Shoes wear out, so their replacement cycle is short — even established consumers need to buy them again and again.

For example, Italian shoes and leather goods business Tod's has struggled to maintain market share as competing brands develop their own versions of its iconic driving shoe — often at a lower cost. In 2017, the company reported sales of €963.3 million, down more than 4 percent from a year earlier. Another Italian heritage label known for its footwear, Salvatore Ferragamo, saw net profits drop 42 percent in 2017. In early 2018, chief executive Eraldo Poletto exited the company and the 90-year brand is aiming to course correct by installing British-American shoe designer Paul Andrew, whose footwear collections for the brand have been well-received, as its head of women's ready-to-wear as well. Andrew showed his first collection at Milan Fashion Week in February 2018.

So, what makes footwear so tricky?

One challenge is that a shoe's success is predicated on the temporal relevance of its silhouette, even more so than fashion or handbags. (Kitten heels and flats may be having a moment, but just a few years ago platform pumps were de rigueur.) If a creative director is not able to master the current look — all while maintaining a distinctive brand identity — it's difficult to sustain momentum.

“The big question for investors is, 'How long can a business that’s made up of a single shoe last?'” asked Robert Burke, chief executive of advisory firm Robert Burke Associates. “Can they go beyond what they’ve done in the past or is it a one-trick pony?”

And yet, the category continues to hold the interest of investors and luxury groups, in part because of the expertise needed to produce a quality shoe. "It is the most difficult category in terms of product development and manufacturing," says Franco Pené, chairman of Onward Luxury Group, which acquired a controlling stake in London-based label Charlotte Olympia in 2017 for its manufacturing expertise. "A one-millimetre difference can be a pain for your feet. It's not a product that is so easy to manage." (In February 2018, Charlotte Olympia's three American subsidiaries filed for bankruptcy protection in the US, citing "unprecedented brick and mortar retail disruption." These businesses were separate from the UK-based business in which Onward invested.)

Consumer appetite for luxury sneakers — which generated €3.5 billion in 2017, up 10 percent year-over-year — is also fuelling the footwear fire. From Balenciaga's "dad" sneakers to Valentino's low-top trainers, nearly every major fashion brand now has a robust sneaker programme. "Women come to lunch in Chanel suits and sneakers," said Karine Ohana, co-managing partner of the Paris-based Ohana & Co, an independent investment bank that advises on M&A and represented Onward Luxury Group when it acquired Charlotte Olympia. "Whatever happens, the trend of tomorrow is that shoes will become more and more technical and support the physical needs of individuals."

It is labels with classic sensibility and operational know-how that are most coveted.

So, which brands are investment targets? Makers specialising in trainers are top of mind. (As are the stores that sell them: In February 2018, LVMH’s investment vehicle Luxury Ventures put money into New York-based multi-brand retailer Stadium Goods.)

But it's the labels with classic sensibility and operational know-how that are most coveted. There is plenty of interest around ultra-high-end Italian brand René Caovilla, but family owners say they do not want to sell. Mansur Gavriel — which started in handbags, rode a successful expansion into shoes and now generates well into the eight figures annually, according to market sources — is a possible target. As is Aquazzura, which generated more than €100 million in retail revenue in 2017, with double-digit growth projected for 2018 amid plans to open nine new stores.

What these brands have in common is a diverse product offering that can theoretically weather aesthetic shifts. "A trend-driven and specific brand can grow quite fast in the early days, but then it plateaus a bit unless the creative director is able to broaden up," Maceira de Rosen said. "Aquazzura is doing extremely well because it was able to build a very nice range beyond the lace-up that made it famous."

Out of the larger, more established brands, Christian Louboutin is the one investors are watching closely, though its signature red soles read as passé in some circles, with high heels making up 44 percent of its product range. (Its second-largest category is sneakers, which make up 15 percent of the line.) But it's certainly a widely distributed brand with global name recognition, as well as proven success in category extensions including handbags and beauty — in particular, nail polish. "The one that everyone is waiting for is Louboutin," Ohana said. Earlier this year, the independent French brand signed a licensing deal with Puig in hopes of expanding the beauty line's distribution.

But the true white whale may be the most well-regarded shoe brand of all: Manolo Blahnik. The label is enjoying the spotlight once again after receding to the background during the years dominated by platform pumps. "What's so interesting is that Manolo has stayed so true to his design aesthetic," Burke said. "Whenever everyone was doing a platform, he refused."

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