Axios Pro Exclusive Content

FTC sues to block Tapestry's acquisition of Capri

Illustration of a pair of aviator sunglasses with scales of justice moving up and down in one lens.

Illustration: Brendan Lynch/Axios

The Federal Trade Commission sued today to block Tapestry's $8.5 billion acquisition of Michael Kors' parent Capri Holdings.

Why it matters: The move by the regulator underscores just how tough its chair Lina Khan continues to be on industry consolidation.

Catch up quick: Tapestry owns Coach, Kate Spade and Stuart Weitzman, while Capri includes Versace and Jimmy Choo in addition to Michael Kors.

Zoom in: Tapestry and Capri are among the largest makers of fashion and accessories in the U.S., but even a merger of the two would still be dwarfed by European rivals such as LVMH and Kering.

  • The two companies said in separate statements that they will defend the deal in court.

What they're saying: The FTC cited Tapestry's history as a serial acquirer and said that the deal not only reduces competition for customers, it "threatens to eliminate the incentive for the two companies to compete for employees."

  • "There is no question that this is a pro-competitive, pro-consumer deal and that the FTC fundamentally misunderstands both the marketplace and the way in which consumers shop," Tapestry said in a statement.
  • "The market realities, which the government's challenge ignores, overwhelmingly demonstrate that this transaction will not limit, reduce, or constrain competition," Capri said in a statement. "The U.S. FTC is the only regulator that did not approve this transaction, which received required approvals from all other jurisdictions."
Go deeper