Tapestry-Capri Merger Will Go to Court This September
The court hearing for the Federal Trade Commission’s attempt to block Coach-owner Tapestry Inc.’s acquisition of Versace-parent Capri will begin on September 9.
Update (5/1/2024): The US Federal Trade Commission’s lawsuit seeking to block Tapestry, Inc., parent to the Coach and Kate Spade brands, from acquiring rival Capri Holding Ltd., which owns Michael Kors, Versace and Jimmy Choo, will head to court on September 9, according to a judge via Bloomberg.
The preliminary injunction hearing is expected to continue through the following week, per the judge. Should the judge rule against the merger, the fate of the Tapestry-Capri deal will be decided at the FTC’s in-house court.
“I’m going to work to keep the case moving very quickly,” Judge Jennifer Rochon said in Manhattan federal court earlier this week.
Original Story (4/23/2024): The US Federal Trade Commission is suing Coach and Kate Spade parent company Tapestry in an attempt to halt its acquisition of Capri, saying that the deal would eliminate direct competition in the luxury handbag space.
The $8.5 billion USD deal was announced in August 2023. Tapestry, which also owns Stuart Weitzman, brings in upwards of $12 billion USD annually, while Capri – which owns Michael Kors, Versace and Jimmy Choo – has an annual revenue of around $4 billion USD, per AP.
The FTC requested more information from the two companies on the deal back in November. Following the deal, Tapestry would become the fourth-largest luxury fashion company in the world and would employ more than 30,000 workers globally. It would also allow Tapestry to have a bigger presence in the European market, which is largely dominated by LVMH.
The companies had already received regulatory approval in the EU and Japan.
In a statement, the FTC said that the “proposed merger threatens to deprive millions of American consumers of the benefits of Tapestry and Capri’s head-to-head competition, which includes competition on price, discounts and promotions, innovation, design, marketing and advertising.”
“Capri Holdings strongly disagrees with the FTC’s decision,” Capri said in its own statement. “The market realities, which the government’s challenge ignores, overwhelmingly demonstrate that this transaction will not limit, reduce, or constrain competition.”
Tapestry said that “there is no question that this is a pro-competitive, pro-consumer deal and that the FTC fundamentally misunderstands both the marketplace and the way in which consumers shop.”
