The U.S. Federal Trade Commission is attempting to halt the $8.5 billion merger between Tapestry and Capri Holdings, claiming that the deal would stifle competition in the "accessible luxury" handbag market. The FTC argues that the merger, involving Tapestry's Coach and Kate Spade brands and Capri's Michael Kors, would result in higher prices, fewer promotions, and reduced innovation, with Tapestry controlling over 50% of the market. The regulator defines this segment as handbags priced between $100 and below $1,000, a range that dominates both Coach and Michael Kors' offerings. The trial, led by U.S. District Judge Jennifer Rochon, saw the FTC present internal company emails to demonstrate the fierce competition between the brands.
Tapestry's defense countered that the FTC's definition of the "accessible luxury" market does not reflect the broader handbag market, where customers have abundant choices. Michael Kors' declining market relevance, due to shrinking demand and reduced pricing, was highlighted as a challenge by Capri's lawyers. The trial is expected to last a week and a half, with testimonies from key figures such as Tapestry CEO Joanne Crevoiserat and designer Michael Kors. This case follows the merger's approval by antitrust regulators in Japan and the European Union earlier in 2024.
