US judge blocks Coach owner's $11b buyout of Versace parent

Deal would reduce competition among makers of accessible luxury handbags, she rules

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A US judge moved on Oct 24 to block a merger of the fashion companies that own the Coach, Kate Spade, Michael Kors and Versace brands, ruling that the tie-up would "substantially lessen competition" among makers of accessible luxury handbags.

The Federal Trade Commission (FTC) sued to block the US$8.5 billion (S$11.2 billion) deal in the spring. The case was a rarity in the fashion world, given how competitive the industry is and the relatively low barriers to enter.

Judge Jennifer Rochon seemed to accept the trade commission's argument that millions of consumers could end up paying more for handbags and other fashion items because the combined company would no longer have the incentive to compete on price.

"Antitrust has come into fashion," Judge Rochon wrote in her ruling.