Capri Holdings Shares Slump as Judge Blocks Merger with Tapestry

In premarket trade on Friday, shares of Capri Holdings, the parent company of Michael Kors and Jimmy Choo, fell almost 45% after a US judge banned the firm’s planned $8.5 billion merger with Tapestry, the owner of Coach. In a court document that Yahoo Finance was able to get, US District Judge Jennifer Rochon ruled that antitrust had entered the fashion industry, stating that a merger between the two fashion giants would significantly reduce competition in the accessible luxury handbag market.

FTC Blocks Tapestry-Capri Merger Amid Concerns Over Fashion Industry Competition

Last year, Tapestry and Capri made their planned merger public. Combining Capri’s Versace, Jimmy Choo, and Michael Kors with Tapestry’s Coach, Stuart Weitzman, and Kate Spade would have placed six well-known fashion labels under one roof. In April, the Federal Trade Commission filed a motion to halt the acquisition by requesting a preliminary injunction. Rochon issued that order on Thursday. However, following the late Thursday news, Tapestry’s stock rose around 12%, going against Capri’s trend.

Tapestry and Capri operate in an industry that is intensely competitive and dynamic, constantly expanding, and highly fragmented among both established players and new entrants. We face competitive pressures from both lower- and higher-priced products and continue to believe this transaction is pro-competitive and pro-consumer.

Tapestry

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