US antitrust body sues to block $11.6b Tapestry-Capri merger

Enforcers say deal will raise prices of fashion accessories, harming consumers

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The US Federal Trade Commission (FTC) has sued to stop Tapestry's US$8.5 billion (S$11.6 billion) takeover of rival Capri Holdings, marking the first time the Biden administration has used its aggressive antitrust enforcement to try to stop a deal in the fashion accessories sector.

Antitrust enforcers said on April 22 that Tapestry's acquisition of Capri would raise prices on handbags and accessories in the affordable luxury sector, harming consumers.

Tapestry owns Coach, Kate Spade and Stuart Weitzman; Capri controls labels Michael Kors, Versace and Jimmy Choo.

A combined Tapestry and Capri would be the second-largest personal luxury goods company in the US in sales, behind LVMH and ahead of Gucci owner Kering and Cartier owner Richemont, according to data provider Euromonitor.

This would give the new conglomerate close to 10 per cent of the US market for personal luxury goods, which include handbags, clothing, footwear and jewellery.

"With the goal to become a serial acquirer, Tapestry seeks to acquire Capri to further entrench its stronghold in the fashion industry," Mr Henry Liu, director of the FTC's Bureau of Competition, said in a statement.

Tapestry chief executive officer Joanne Crevoiserat said in an interview that the fashion industry is "intensely competitive" and her company competes with hundreds of other brands.