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The FTC Is Suing to Block a Mega-Merger That Would Unite Coach and Michael Kors The deal between the fashion houses' parent companies would be worth an estimated $8.5 billion.

By Emily Rella

Key Takeaways

  • The FTC is suing to block Coach's parent company, Tapestry, from buying Michael Kors' parent company, Capri.
  • The deal was set to cost an estimated $8.5 billion.
  • Tapestry's CEO says the FTC is "fundamentally misunderstanding" today's fashion marketplace.

The Federal Trade Commission (FTC) is suing to block a mega-merger that would unite luxury fashion brands, Michael Kors and Coach.

Coach's parent company, Tapestry (which also oversees fashion brands Kate Spade New York and Stuart Weitzman) is attempting to buy Michael Kors' parent company, Capri (which also oversees Versace and Jimmy Choo), in a deal that was set to cost an estimated $8.5 billion.

But in Monday's filing, the FTC claims that the merger would eliminate competition between the fashion houses and could potentially reduce employee wages and benefits.

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"The proposed merger threatens to deprive millions of American consumers of the benefits of Tapestry and Capri's head-to-head competition, which includes competition on price, discounts and promotions, innovation, design, marketing, and advertising," the FTC said, per Reuters.

The new mega-company would have an estimated 33,000 employees globally.

Tapestry CEO Joanne Crevoiserat told Reuters that the FTC was "fundamentally misunderstanding" the fashion marketplace of today, arguing that competition for talent goes beyond just the fashion industry.

"Capri Holdings strongly disagrees with the FTC's decision," Capri asserted in a statement. "The market realities, which the government's challenge ignores, overwhelmingly demonstrate that this transaction will not limit, reduce, or constrain competition."

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The deal was first set into motion in August 2023 when Tapestry agreed to buy Capri to create a bigger U.S.-based fashion house that would have a chance to compete with larger European ones.

Capri Holdings was down over 17.5% year-over-year as of Tuesday morning while Tapestry was down just over 5% in the same period.

Emily Rella

Entrepreneur Staff

Senior News Writer

Emily Rella is a Senior News Writer at Entrepreneur.com. Previously, she was an editor at Verizon Media. Her coverage spans features, business, lifestyle, tech, entertainment, and lifestyle. She is a 2015 graduate of Boston College and a Ridgefield, CT native. Find her on Twitter at @EmilyKRella.

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