All Access

Retail Deals

Standard

Retail Deals Alerts

Alert

Retail Deals Thought Bubble

Thought Bubble

mustard

BFD Expert Voices - Retail Deals

BFD Expert Voices

topics

politics-policy

epstein-files

donald-trump

2026-midterm-elections

immigration

behind-the-curtain

race-and-equity

technology

privacy-tech-regulation

automation-and-ai

tiktok-news

big-tech

social-media

cybersecurity

economy

social-security

inflation

tariffs

federal-reserve

jobs

transportation

business

stock-market-news

retail-news

crypto

media

elon-musk

dealmaking

health

rfk-jr

drug-prices

axios-explains-abortion

public-health

world

israel

axios-explains-ukraine

iran

russia

china

energy-climate

nuclear-energy

climate-energy-policy

climate-change

extreme-weather

alternative-energy

electric-vehicles

science

emerging-tech

biomedicine

newsletters

pittsburgh

atlanta

san-diego

charlotte

boulder

washington-dc

kansas-city

dallas

denver

detroit

des-moines

austin

boston

chicago

cleveland

columbus

houston

indianapolis

miami

nashville

new-orleans

nw-arkansas

philadelphia

phoenix

portland

richmond

salt-lake-city

san-antonio

san-francisco

seattle

tampa-bay

twin-cities

raleigh

huntsville

colorado-springs

axios-local

axios-pro

axios-live

the-axios-show

The FTC's trial aiming to block Capri and Tapestry's $8.5 billion merger concluded Monday.

Why it matters: The decision will indicate how far regulators can stretch the definition of anticompetitive practices.

The latest: Wall Street was apparently bullish on the deal's chances: Capri's stock jumped 7.5% on Monday, closing at about $42.44 per share. As of Tuesday afternoon, its stock has remained mostly flat, at $42.14 per share.

Tapestry's shares slipped 1.4% from Monday to Tuesday.

What they're saying: "The FTC story is about head-to-head competition," says James Weingarten, a partner at Milbank and former FTC litigation lawyer.

This case won't move the needle for all mergers like this, but it can give the FTC impetus to push for cases that focus on a particular subset of consumers.

"We believe investor sentiment skews constructive as the defense emphasizes points around the discretionary and highly competitive nature of the handbag sector and raises questions on the data used by the FTC's economic expert," TD Cowen analyst Oliver Chen writes in a note.

Yes, but: U.S. District Judge Jennifer Rochon of New York, who is presiding over the case, could decide the FTC needs a more robust definition of the marketplace.

If Rochon calls for more precise documentation around head-to-head competition, "that undermines the FTC's ability to break cases outside of markets where they're more easily defined," Weingarten says.

What's next: Rochon's decision could take from three weeks to three months. A preliminary injunction will enable the agency to prepare for its own, internal trial against the companies.

Zoom in: At the crux of the argument was the definition of the "accessible luxury" market.

Tapestry lawyers maintain that the handbag market is "intensely competitive," while the FTC sought to prove the deal would leave shoppers — especially working- and middle-class women — with fewer options and more expensive handbags.

Tapestry says the brands, which compete across different price points, will continue to compete with each other after the deal closes.

The FTC's economic expert says a combined company would be granted enough pull to raise prices by as much as 17%, costing consumers around $365 million annually.

State of play: Armed with a new set of merger guidelines, the FTC has been increasingly aggressive, with consumer protection and preserving competition at the center of most recent cases.

An injunction against the approximately $25-billion Albertsons-Kroger's merger could effectively kill it. The trial ended last month.

Tempur Sealy's proposed $4 billion acquisition of Mattress Firm is in the FTC's crosshairs and it remains to be seen if its voluntary divestiture will help win the regulator over.

Saks and Neiman Marcus' $2.65 billion deal is awaiting regulatory approval.

Plus, the FTC is waging a large antitrust battle against Amazon.

Catch up quick: Capri and Tapestry announced plans to combine in August 2023, tying together Tapestry's Coach, Kate Spade and Stuart Weitzman brands with Capri's Versace, Michael Kors and Jimmy Choo labels. The FTC sued to block the tie-up in April.

Capri-Tapestry antitrust trial concludes

An FTC win could could bolster the agency's merger guidelines

an illustration of a paper shopping bag with velvet ropes for handles

Retail deals

The FTC&#x27;s trial aiming to block <a class="gtmContentClick" data-vars-link-text="Capri and Tapestry&#x27;s $8.5 billion merger" data-vars-click-url="https://www.axios.com/pro/retail-deals/2024/04/22/ftc-tapestry-capri-merger-luxury-fashion" data-vars-content-id="cf79eb21-2201-4344-b7bb-43cacaa4feb8" data-vars-headline="Capri-Tapestry antitrust trial concludes" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/pro/retail-deals/2024/04/22/ftc-tapestry-capri-merger-luxury-fashion" target="_self">Capri and Tapestry&#x27;s $8.5 billion merger</a> concluded Monday.Why it matters: The decision will indicate how far regulators can stretch the <a class="gtmContentClick" data-vars-link-text="definition of anticompetitive practices" data-vars-click-url="https://www.axios.com/pro/retail-deals/2024/04/29/ftc-lawsuit-tapestry-capri-merger-antitrust-strategy" data-vars-content-id="cf79eb21-2201-4344-b7bb-43cacaa4feb8" data-vars-headline="Capri-Tapestry antitrust trial concludes" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/pro/retail-deals/2024/04/29/ftc-lawsuit-tapestry-capri-merger-antitrust-strategy" target="_self">definition of anticompetitive practices</a>.

Capri-Tapestry antitrust trial concludes

What to read next