Coach is preparing to buy Kate Spade, according to internal sources at both companies. The acquisition would bring together two of the strongest American brands with regards to digital and omnichannel, posing a new threat for EU-focused traditional luxury conglomerates.

Both brands earn top-10 spots in both L2’s Digital IQ Index: Specialty Retail and Digital IQ Index: Fashion, testifying to their digital acumen. Coach boasts long-standing omnichannel strengths that many retailers still lack, including local inventory status, in-store pickup functionality, and e-gifting services. The brand site offers a streamlined shopping experience, particularly on mobile, driven by cross-selling features.

Kate Spade has also been an e-commerce leader, offering strong guided selling tools including shoppable videos as well as enhanced cart features and live customer service during checkout. As a result, the brand garners more site traffic than any other Fashion brand in L2’s study.

Both brands are also forward-thinking when it comes to social commerce. Last year, Coach and Kate Spade were two of the first labels to join Instagram’s e-commerce beta test, which let users view product details within posts and even make purchases without leaving the native app. Linking these digital luminaries creates a stronger competitor for which other Fashion and Retail brands might want to watch out.

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