A federal court judge has blocked the proposed merger between Tapestry-owned Coach and Capri parent Michael Kors. The reasoning behind the judge's order wasn't immediately clear but the FTC had previously argued the merger would harm consumers, raise prices and reduce employee benefits. Tapestry and Capri announced their $8.
5 billion merger last year but the deal has been stalled after the FTC sued to block it. A federal judge blocked Tapestry's acquisition of Capri on Thursday following a brief trial last month in New York. In her order, Judge Jennifer Rochon granted the Federal Trade Commission's motion for a preliminary injunction to block the proposed merger, which would marry America's two largest luxury houses and put six fashion brands under one company: Tapestry's Coach, Kate Spade and Stuart Weitzman with Capri's Versace, Jimmy Choo and Michael Kors.
Tapestry's stock surged 10% after the order was filed while Capri's plunged about 50%. Representatives for Tapestry and Capri didn't immediately return requests for comment. Rochon's reasoning behind the order wasn't immediately clear.
A detailed opinion was filed under seal and isn't currently accessible to the public. The former rivals and longtime competitors announced the $8.5 billion deal more than a year ago but the Federal Trade Commission sued to block it in April and sought a preliminary injunction to stop the agreement.
The FTC argued if the companies merged, it would harm consumers by making the affordable han.
