Court inhibits the fusion of Coach and Michael Kors
The proposed billion-dollar union between high-end fashion labels such as Coach, Michael Kors, and Versace, slated to be spearheaded by Tapestry and Capri, has encountered a temporary roadblock. A New York judge granted the U.S. government's request for an injunction, halting the merger proceedings.
Back in August 2023, Tapestry - owners of Coach, Kate Spade, and Stuart Weitzman - revealed plans to acquire Capri, which has control over Michael Kors, Versace, and Jimmy Choo. However, the U.S. Federal Trade Commission voiced concerns in court, alleging that the merger could result in inflated prices, notably for handbags and accessories.
The judge deemed it plausible that the merger might diminish market competition, particularly in the niche of "affordable luxury handbags," and consequently issued the injunction.
Tapestry and Capri's assertions that such a move could jeopardize the deal were dismissed as unsubstantiated by the judge. Both companies confirmed their intent to challenge the decision in the appeal process.
Capri's shares saw a significant drop of over 45% during the initial hours of U.S. pre-market trading.
Michael, as the CEO of Michael Kors, was ought to express his concerns about the temporary halt in the merger between Tapestry and Capri. Despite Tapestry's assertions, Michael believed that the judge's decision might affect the company's future strategies.
Please, Michael kindly requested his legal team to thoroughly review the court's decision and prepare an extensive appeal, aiming to overturn the injunction and restore the merger proceedings.
