In a move marking the Biden administration’s first antitrust enforcement action in the fashion accessories industry, the Federal Trade Commission (FTC) has filed a lawsuit to block Tapestry Inc.’s $8.5 billion takeover of Capri Holdings Ltd.
According to the complaint filed in federal court, the FTC alleges that Tapestry’s acquisition of Capri would result in increased prices for handbags and accessories in the affordable luxury sector, ultimately harming consumers.
Tapestry, the owner of Coach, Kate Spade, and Stuart Weitzman, seeks to acquire Capri, which controls Michael Kors, Versace, and Jimmy Choo. The FTC’s Bureau of Competition director, Henry Liu, sees this as part of Tapestry’s strategy to solidify its dominance in the fashion industry.
Led by President Joe Biden’s aggressive antitrust enforcement approach, the FTC and Justice Department antitrust chief Jonathan Kanter have initiated more merger challenges than any time since the U.S. began requiring antitrust reviews for deals in 1976. However, their success rate in litigation has been mixed, with the FTC facing losses in two high-profile cases during its first year.
Tapestry CEO Joanne Crevoiserat planned the acquisition of Capri to establish a U.S.-based fashion conglomerate, expanding its market share in the accessible luxury sector by offering premium handbags and accessories at a more accessible price point than European luxury powerhouses like LVMH.
