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FTC Sues Companies Behind Coach, Michael Kors, and Kate Spade

  • The FTC has announced a lawsuit blocking a merger between luxury brands Tapestry and Capri.
  • The FTC says Tapestry’s acquisition of Capri could make luxury bag options more affordable.
  • Tapestry and Capri say the luxury handbag market is too saturated for this to happen.

The FTC is trying to prevent a merger between the Tapestry and Capri brands that would combine the Coach, Kate Spade, Michael Kors, Jimmy Choo and Versace brands under a single luxury house.

Tapestry, Inc., owner of Kate Spade and Coach, announced plans in August to acquire Capri Holdings, owner of Michael Kors, for $8.5 billion. Regulators in the European Union and Japan favor the acquisition, but U.S. regulators are taking a different approach.

The FTC said it filed a lawsuit Monday to block the merger. The commission said in a press release that it believed the action would give Tapestry “a dominant share of the ‘accessible luxury’ handbag market.”

If Tapestry took over Michael Kors, the FTC claims, it would make the brand’s luxury options more expensive.

“Aiming to become a serial acquirer, Tapestry seeks to acquire Capri to further strengthen its strong position in the fashion industry,” Henry Liu, Director of the FTC’s Bureau of Competition, said in the release. press. “This deal threatens to deprive consumers of competition for affordable handbags, while hourly workers risk losing the benefits of higher pay and more favorable working conditions.”

Tapestry and Capri Holdings released statements opposing the FTC’s charges and vowed to fight the lawsuit in court. The companies disagreed with the FTC, saying they operate “an extremely competitive and highly fragmented industry.”

“Ultimately, Tapestry and Capri face competitive pressures from both lower-priced and more expensive products,” Tapestry said in its statement. “In bringing this case, the FTC has chosen to ignore the reality of a vibrant and growing $200 billion global luxury industry.”

Tapestry did not immediately respond to a request for comment. Capri Holdings directed BI to its public statement and the FTC declined to comment further.

The FTC, under the leadership of Chairman Lina Khan, has pursued a series of mergers and acquisitions in recent years, including Microsoft’s purchase of Activision Blizzard and Meta’s purchase of the virtual reality company Within. These two lawsuits failed to block these purchases.

This is the first lawsuit filed by the FTC in the fashion accessories industry, according to Bloomberg.

Most recently, the agency sued to block the $24.6 billion merger of grocery chains Albertsons and Kroger, which it said was “the largest supermarket merger proposed in the history of the United States. The companies responded by pledging to sell hundreds of stores to rival grocery chain C&S Wholesale Grocers.


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