Brisbane-based clothing and footwear retailer Colorado Group Ltd is aiming to update its image with a bid for Palmer Corporation Ltd, owner of the trendy JAG label.

Press reports name bids of between $7.6m and $8.6m for the mid to upmarket fashion company. Palmer's CEO, John O'Brien, says he will recommend acceptance of the offer. Betrola Investments, O'Brien's family company, which owns 19.9 per cent of Palmer, has signalled it will accept the Colorado offer.

Colorado has 330 stores in Australia. A further 27 stores will be added if the offer is accepted. Colorado's shares held at $A1.15 on the news, but Palmer's share price leapt 40 per cent to $A0.39. Colorado says it expects to meet earnings forecasts of $A22.2m ($12.3m) for the year.