Capri-Tapestry Merger Blocked by FTC, Companies End $8.5 Billion Deal
Nov/15/2024
The planned $8.5 billion merger between two of America’s largest luxury goods retailers, Capri and Tapestry, was canceled after the Federal Trade Commission (FTC) secured a preliminary court block, citing concerns about loss of direct competition between the two companies. Capri, the parent of Versace, Jimmy Choo, and Michael Kors, and Tapestry, which owns Coach, Kate Spade, and Stuart Weitzman, had aimed to join forces to better compete with major European luxury conglomerates. Despite merger approval from regulators in the EU and Japan, U.S. regulators resisted, leading the companies to conclude that regulatory approval within the set timeframe was unlikely. Tapestry agreed to reimburse Capri approximately $45 million in merger-related costs and subsequently announced a buyback of its shares. The FTC's intervention was unexpected in a highly fragmented U.S. luxury market, where legal experts previously assessed healthy competition.
