Court Blocks Tapestry-Capri Merger; Appeal Planned

The U.S. District Court in New York has blocked the planned $8.5 billion merger between Tapestry, owner of Coach and Kate Spade, and Capri Holdings, siding with the FTC's argument that it would reduce competition in the accessible luxury handbag market. The FTC claimed that the merger would diminish competition, leading to higher prices, less innovation, and negatively impacting over 30,000 employees. Tapestry disagrees with the ruling, arguing the merger is pro-competitive and plans to appeal. This decision follows an eight-day trial where the FTC argued that the merger would create a dominant player capable of raising prices unfairly. Following the ruling, Capri's shares plummeted nearly 50%, while Tapestry's shares rose by 15%. The case highlights the FTC's broader stance against market consolidation in the luxury fashion industry, despite Tapestry's contention that the retail industry remains highly competitive and fragmented.