The Federal Trade Commission on Monday sued to block the merger of two premium handbag makers, saying the merger would give the combined firm too much power in the market for accessible luxury satchels.
In blocking Tapestry’s $8.5 billion acquisition of rival Capri Holdings, the FTC is also taking aim at their combined power as an employer. It said the deal could negatively affect employees’ wages and workplace benefits. Post acquisition, the combined Tapestry and Capri would employ roughly 33,000 employees worldwide, the agency said in a statement.
The agency has been taking a more aggressive stance on antitrust enforcement. It recently sued to block Kroger’s $25 billion acquisition of Albertsons, a bid to upend the nation’s biggest supermarket deal. And it sued Amazon, alleging the online retailer uses anticompetitive practices to maintain its power.
Tapestry, the owner of Coach, struck a deal in August to buy Capri, which owns Michael Kors. A combination would put multiple brands, including Kate Spade, Stuart Weitzman, Jimmy Choo and Versace under one roof and create a rival to European luxury-goods conglomerates.
The combined company would have more than $12 billion in annual sales and serve a range of shoppers, from budget-conscious, aspirational luxury customers to the upper echelons of British and Italian fashion.
Yet, it would still be dwarfed by European rivals and lack the high-wattage labels and diversity that have fueled LVMH’s success. The French luxury-goods giant has annual sales of roughly $90 billion and owns dozens of brands—from Dior to Dom Pérignon—across fashion, leather goods, jewelry, and wine and spirits.
Antitrust regulators in Europe and Japan signed off on the deal earlier this month. Tapestry has said it expects to close the deal by the end of 2024.
Write to Suzanne Kapner at [email protected]
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