Tapestry plans to appeal US judge’s decision to block its $8.5bn acquisition of Capri Holdings.
- The US Federal Trade Commission argues the merger would stifle competition and increase prices.
- Judge Jennifer Rochon ruled against Tapestry, defending the necessity and role of handbags.
- Tapestry views the ruling as flawed, stating the fashion market remains competitive.
- The acquisition aims to combine luxury brands, forming a fashion powerhouse in the US.
Tapestry, a prominent name in accessible luxury, has declared its intention to contest a recent court ruling that obstructs its substantial acquisition of Capri Holdings. The move follows a decision by a US judge, who agreed with the Federal Trade Commission’s stance against the merger.
The FTC, an autonomous agency dedicated to consumer protection, contended during an eight-day hearing in New York that the proposed merger would effectively reduce competition between the two leading handbag manufacturers. This, they argued, could potentially allow the new entity to escalate prices unfairly, thereby disadvantaging consumers.
Presiding over the case, US District Judge Jennifer Rochon upheld the FTC’s perspective, articulating that despite handbags not being essential items, they hold significant importance to many consumers. According to Reuters, she remarked that handbags are vital not only for fashion expression but also for their practical uses in daily life.
In response, Tapestry expressed its disagreement with the court’s findings, describing the outcome as both unfortunate and misguided. The company believes that the current market for luxury goods is highly competitive and continuously evolving, packed with diverse players ranging from budget to premium segments.
Tapestry has reaffirmed its commitment to challenging the ruling, asserting that the merger with Capri Holdings is both consumer-friendly and competition-positive. The deal, initially publicised in August 2023, promises to unite influential fashion labels, potentially creating a dominant force in the luxury sector in the United States.
The forthcoming appeal by Tapestry will be keenly watched as it unfolds in the legal arena.
