The FTC’s challenge will likely lead to lengthy legal-battle
The parent company of Coach and Kate Spade, Tapestry, has been sued by the US Federal Trade Commission (FTC) to prevent its acquisition of Capri, which owns Michael Kors, Versace, and Jimmy Choo, for $8.5 billion USD.
The FTC has raised concerns that the merger would eliminate direct competition in the luxury handbag sector. This deal was announced in August 2023, and if completed, Tapestry would merge with Capri, resulting in Tapestry becoming the fourth-largest luxury fashion conglomerate globally. Tapestry generates over $12 billion USD annually, while Capri has an annual revenue of around $4 billion USD.
The combined entity would employ over 30,000 people globally and increase its presence in the European market, which is currently dominated by LVMH. Although the merger received regulatory approval in the EU and Japan, the FTC’s lawsuit challenges it on the grounds of potential harm to competition and consumer benefits. The FTC believes that the merger could affect pricing, discounts, innovation, design, and marketing strategies.
