Merger of handbag makers Tapestry, Capri halted as judge sides with FTC in antitrust case

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A U.S. District judge has halted the merger between makers of Coach and Michael Kors handbags, saying it would reduce competition and hurt consumers

NEW YORK — A U.S. District judge has halted the merger between the makers of Coach and Michael Kors handbags, saying it would reduce competition and hurt consumers.

In her ruling Thursday, U.S. District Judge Jennifer Rochon noted that Tapestry Inc. and Capri Holdings are “close competitors” and that the merger would result in “the loss of head-to-head competition" and raise prices for shoppers.

The decision followed seven days of testimony.

In after hours trading shares of Capri fell more than 50% while shares of Tapestry rose 12%.

The ruling came six months after the FTC sued to block Tapestry's $8.5 billion acquisition of Capri, saying that the deal would eliminate direct competition between the fashion companies’ brands like Coach and Michael Kors in the so-called affordable luxury handbag arena.

The agency also said that the deal announced in August 2023 threatens to eliminate the incentive for the two companies to vie for employees and could depress employees’ wages and workplace benefits. The combined Tapestry and Capri would employ roughly 33,000 people worldwide, the agency said.

The two companies' brands cover a wide array of items from clothing to eyewear to shoes. Tapestry has been on an acquisition binge for the past several years, and already owns Kate Spade New York, Stuart Weitzman and Coach. Capri owns the Versace, Michael Kors and Jimmy Choo brands.

Specifically, Tapestry’s Coach and Kate Spade brands and Capri’s Michael Kors brand are close rivals in the handbag market. The FTC had said that they continuously monitor each other’s handbag brands to