“Tapestry and Capri operate in an intensely competitive and dynamic industry, 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. “We intend to appeal the decision, consistent with our obligations under the merger agreement,” a statement from Tapestry said, calling the decision granting the FTC's request for a preliminary injunction “disappointing” and “incorrect since the point of view of the law and the facts”.
Capri Holdings and Tapestry recently announced that they both intend to appeal a US district court's decision allowing the Federal Trade Commission (FTC) to take a preliminary injunction to block the latter's pending acquisition of the former. . Tapestry called the decision granting the FTC's request for a preliminary injunction “disappointing” and “incorrect as a matter of law and fact.”
Tapestry owns brands such as Coach, Kate Spade New York and Stuart Weitzman. Capri Holdings owns Versace, Jimmy Choo and Michael Kors.
In April of this year, the FTC sued to block Tapestry's $8.5 billion acquisition of Capri Holdings, a deal that seeks to combine three close competitors: Tapestry's Coach and Kate Spade brands and the Michael Kors brand. from Capri.
The FTC considered that the agreement, if permitted, would eliminate direct competition between the Tapestry and Capri brands. It would also give Tapestry a dominant share of the “accessible luxury” bag market.
The proposed merger threatens to deprive millions of American consumers of the benefits of direct competition from Tapestry and Capri, including competition in price, discounts and promotions, innovation, design, marketing and advertising, according to a statement from the FTC.
The deal also threatens to eliminate the incentive for the two companies to compete for employees and could negatively affect employee wages and job benefits, he said.
These days, Tapestry and Capri compete in everything from clothing to glasses to shoes.
Fiber2Fashion News Desk (DS)
