The U.S. Federal Trade Commission sued to stop Tapestry Inc.’s $8.5 billion takeover of rival Capri Holdings Ltd., marking the first time the Biden administration has used its aggressive antitrust enforcement to try to stop a deal in the fashion accessories sector.
Antitrust enforcers said Tapestry’s acquisition of Capri would raise prices on handbags and accessories in the affordable luxury sector, harming consumers, according to a complaint filed Monday in federal court.
Tapestry owns Coach, Kate Spade and Stuart Weitzman; Capri controls labels Michael Kors, Versace and Jimmy Choo.
“With the goal to become a serial acquirer, Tapestry seeks to acquire Capri to further entrench its stronghold in the fashion industry,” Henry Liu, director of the FTC’s Bureau of Competition, said in a statement.
This is the first time that President Joe Biden’s aggressive antitrust enforcement has targeted the fashion sector. Since their appointment, Khan and Justice Department antitrust chief Jonathan Kanter have brought the highest number of merger challenges since the U.S. began requiring antitrust reviews before deals close in 1976. Their success in litigation has been more mixed, however, with the FTC losing two high-profile challenges in its first year.
Tapestry Chief Executive Officer Joanne Crevoiserat spearheaded the company’s acquisition of Capri last year with the aim of creating a U.S.-based fashion conglomerate to expand market share in what’s known as the accessible luxury sector, selling handbags and other accessories that are high-end but cheaper in price than those sold by European luxury juggernauts like LVMH.
