Tapestry plans to contest a US ruling blocking its $8.5bn acquisition of Capri Holdings.
- The FTC argued the merger would reduce competition and lead to higher prices.
- US Judge Rochon dismissed Tapestry’s claim that handbags aren’t essential for consumers.
- Tapestry insists the ruling is flawed and plans to appeal for consumer benefit.
- The acquisition aims to merge luxury brands like Coach and Versace under Tapestry’s umbrella.
Tapestry is preparing to contest a US court decision that halted its proposed $8.5 billion acquisition of Capri Holdings. The controversy arose from the Federal Trade Commission’s (FTC) position, which claimed the merger would diminish competition between the two handbag producers, potentially enabling them to unjustly raise prices. The FTC’s concerns were voiced during an eight-day trial, emphasizing the risk of forming a dominant market player that could undermine consumer interests.
In this context, US District Judge Jennifer Rochon ruled against Tapestry’s defense, which argued that handbags are not crucial items. Their stance was that consumers could avoid high prices by choosing not to purchase these luxury items. However, Judge Rochon countered this by highlighting the significance of handbags for many women, not only as a fashion statement but also as an essential part of their daily lives.
Tapestry, however, disagrees with the decision, citing it as legally and factually incorrect. The company issued a statement expressing disappointment yet reaffirmed its belief in the competitive and consumer advantages of the merger. Despite the ruling, Tapestry remains committed to moving forward with an appeal in alignment with its merger agreement obligations.
This acquisition was initially announced in August 2023, with Tapestry aiming to consolidate major fashion entities under its management. The integration planned to bring brands such as Coach, Kate Spade, Stuart Weitzman, Versace, Jimmy Choo, and Michael Kors into a singular conglomerate, potentially reshaping the landscape of luxury fashion in the United States.
Tapestry remains steadfast in its pursuit to overturn the court ruling, seeking to finalize its strategic merger with Capri Holdings.
