The FTC filed suit to block the $8.5 billion merger between the owners of Coach and Michael Kors

The US Federal Trade Commission is filing a lawsuit to block Capri Holdings’ $8.5 billion acquisition of Tapestry, saying the deal would harm consumers by reducing competition and raising prices in the affordable luxury industry.

The Federal Trade Commission filed documents in federal court Monday challenging a proposed deal that would give one company control of six fashion brands: Tapestry’s Coach, Kate Spade and Stuart Weitzman, and Capri’s Michael Kors, Versace and Jimmy Choo.

The FTC said the acquisition could negatively impact millions of U.S. consumers who currently benefit from competition between Tapestry and Capri, as well as the approximately 33,000 people employed by both companies worldwide.

Henry Liu, director of the FTC’s Bureau of Competition, said: “Tapestry intends to acquire Capri to become a serial acquirer and strengthen its position in the fashion industry.” Find out. “This deal could deprive consumers of competition for affordable handbags, while hourly workers lose the benefits of higher wages and more favorable working conditions.”

Tapestry rejects the FTC’s position, saying the agency doesn’t understand markets or how people shop.

“Most importantly, Tapestry and Capri face competitive pressure from both low- and high-priced products,” the company said. billion dollars.” statement.

Tapestry It said it will acquire the Capri in August 2023. In 2022, these companies had sales of more than $12 billion.