A judge has agreed with the Federal Trade Commission, ruling Thursday that brands including Coach, Kate Spade, Michael Kors, Versace, and Jimmy Choo do not belong under one roof. Tapestry, which owns the Coach label, had reached an $8.5 million deal to acquire Capri, a rival whose lines include Michael Kors.
The FTC opposed the deal, saying it would reduce handbag competition and raise prices for consumers. US District Judge Jennifer Rochon in New York said the same thing, the reports, in an order that begins, "Antitrust has come into fashion." The FTC said a merger wouldn't affect only the wealthy; one of its lawyers argued that half the buyers of Coach and Michael Kors handbags are in households with annual incomes of less than $70,000.
Concentrating ownership of the brands would give the companies incentives to raise prices, the agency said, estimating that such increases could cost US consumers $365 million. Tapestry and Capri maintained that the handbag market is bigger than that as well as increasingly competitive, with multiple recent entrants, per the . The judge also didn't buy the companies' argument that handbags aren't essentials, that women could avoid buying them if they become too costly.
"Handbags are important to many women," Rochon wrote, "not only to express themselves through fashion but to aid in their daily lives." Tapestry immediately announced plans to appeal the preliminary injunction, per . Capri shares fell almost 50% after the ruling, and shares of.
